Some Barclays PLC (LON:BARC) shareholders may be a little concerned to see that insider Ashok Vaswani recently sold a substantial UK£1.4m worth of stock at a price of UK£1.75 per share. That sale reduced their total holding by 45% which is hardly insignificant, but far from the worst we've seen.
Barclays Insider Transactions Over The Last Year
In fact, the recent sale by Ashok Vaswani was the biggest sale of Barclays shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£1.81. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 45%of Ashok Vaswani's holding.
Over the last year, we can see that insiders have bought 301.15k shares worth UK£260k. On the other hand they divested 1.28m shares, for UK£2.0m. In total, Barclays insiders sold more than they bought over the last year. The average sell price was around UK£1.59. It's not too encouraging to see that insiders have sold at below the current price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Barclays Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.2% of Barclays shares, worth about UK£64m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Barclays Tell Us?
Insiders haven't bought Barclays stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Barclays. In terms of investment risks, we've identified 2 warning signs with Barclays and understanding them should be part of your investment process.
But note: Barclays 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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