Group Chief Risk Officer Of Lloyds Banking Group Sold 37% Of Their Shares

We wouldn't blame Lloyds Banking Group plc (LON:LLOY) shareholders if they were a little worried about the fact that Stephen Shelley, the Group Chief Risk Officer recently netted about UK£1.6m selling shares at an average price of UK£0.70. That's a big disposal, and it decreased their holding size by 37%, which is notable but not too bad.

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Lloyds Banking Group Insider Transactions Over The Last Year

Notably, that recent sale by Stephen Shelley is the biggest insider sale of Lloyds Banking Group shares that we've seen in the last year. That means that even when the share price was below the current price of UK£0.73, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 37% of Stephen Shelley's holding.

In the last twelve months insiders purchased 1.57m shares for UK£941k. But insiders sold 3.68m shares worth UK£2.5m. Over the last year we saw more insider selling of Lloyds Banking Group shares, than buying. They sold for an average price of about UK£0.68. 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. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Lloyds Banking Group

I will like Lloyds Banking Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Lloyds Banking Group insiders own about UK£25m worth of shares. That equates to 0.06% 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 Lloyds Banking Group Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Lloyds Banking Group stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Lloyds Banking Group and understanding them should be part of your investment process.

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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.

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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.