This Insider Has Just Sold Shares In Xero Limited (ASX:XRO)

We wouldn't blame Xero Limited (ASX:XRO) shareholders if they were a little worried about the fact that Rod Drury, the Founder & Non-Executive Director recently netted about AU$240m selling shares at an average price of AU$133. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.

See our latest analysis for Xero

The Last 12 Months Of Insider Transactions At Xero

Notably, that recent sale by Rod Drury is the biggest insider sale of Xero shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of AU$133. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 1.01m shares worth AU$101m. On the other hand they divested 5.41m shares, for AU$650m. Over the last year we saw more insider selling of Xero shares, than buying. 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!

I will like Xero better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does Xero Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Xero insiders own 16% of the company, currently worth about AU$3.1b based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Xero Tell Us?

The insider sales have outweighed the insider buying, at Xero, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Xero is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. While conducting our analysis, we found that Xero has 4 warning signs and it would be unwise to ignore these.

But note: Xero 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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