Some Transurban Group (ASX:TCL) shareholders may be a little concerned to see that the CEO & Executive Director, Scott Charlton, recently sold a substantial AU$16m worth of stock at a price of AU$15.39 per share. Probably the most concerning element of the whole transaction is that the disposal amounted to 57% of their entire holding.
Transurban Group Insider Transactions Over The Last Year
In fact, the recent sale by Scott Charlton was the biggest sale of Transurban Group shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of AU$15.26. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Over the last year, we can see that insiders have bought 21.00k shares worth AU$252k. But they sold 1.42m shares for AU$21m. All up, insiders sold more shares in Transurban Group than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Transurban Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Transurban Group insiders own about AU$39m worth of shares. That equates to 0.09% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Transurban Group Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Transurban Group, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Transurban Group has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.
But note: Transurban 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.
If you’re looking to trade Transurban Group, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.