Close Brothers Group's Stock Sinks To UK£2.06, But Insiders Sold Even Lower

Despite the fact that Close Brothers Group plc's (LON:CBG) value has dropped 11% in the last week insiders who sold UK£168k worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of UK£6.76 is still lower than the current share price.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Close Brothers Group

The Last 12 Months Of Insider Transactions At Close Brothers Group

In the last twelve months, the biggest single sale by an insider was when the CFO, Group Finance Director & Executive Director, Michael Morgan, sold UK£56k worth of shares at a price of UK£7.90 per share. While insider selling is a negative, it helps to know why the transaction is taking place. In this case, this was known as a 'Bed and ISA' transaction where the insider bought back the shares they sold within their ISA. Notably Michael Morgan was also the biggest buyer, having purchased UK£115k worth of shares.

Over the last year, we can see that insiders have bought 21.42k shares worth UK£115k. But they sold 24.92k shares for UK£168k. All up, insiders sold more shares in Close Brothers Group than they bought, over the last year. The average sell price was around UK£6.76. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (UK£2.06), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Close Brothers Group Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at Close Brothers Group. Insiders shelled out UK£34k for shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Does Close Brothers Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From what we can see in our data, insiders own only about UK£767k worth of Close Brothers Group shares. This level of insider ownership is notably low, and not very encouraging.

So What Do The Close Brothers Group Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. Our analysis of Close Brothers Group insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. While it's good to be aware of 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. While conducting our analysis, we found that Close Brothers Group has 1 warning sign and it would be unwise to ignore it.

Of course Close Brothers Group may not be the best stock to buy . So you may wish to see this free collection of high quality companies.

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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.