Scentre Group (ASX:SCG) Insiders Increased Their Holdings

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Scentre Group (ASX:SCG).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Scentre Group

The Last 12 Months Of Insider Transactions At Scentre Group

In the last twelve months, the biggest single purchase by an insider was when Independent Director Michael Wilkins bought AU$206k worth of shares at a price of AU$2.06 per share. We do like to see buying, but this purchase was made at well below the current price of AU$2.80. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Scentre Group insiders bought shares during the last year, they didn't sell. They paid about AU$2.58 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Scentre Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of Scentre Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Scentre Group insiders own about AU$65m worth of shares. That equates to 0.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Scentre Group Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Scentre Group and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Scentre Group. For instance, we've identified 2 warning signs for Scentre Group (1 doesn't sit too well with us) you should be aware of.

But note: Scentre Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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