The Royal Bank of Scotland Group plc (LON:RBS) Insiders Have Been Selling

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in The Royal Bank of Scotland Group plc (LON:RBS).

What Is Insider Buying?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

Check out our latest analysis for Royal Bank of Scotland Group

Royal Bank of Scotland Group Insider Transactions Over The Last Year

The CFO & Executive Director, Katie Murray, made the biggest insider sale in the last 12 months. That single transaction was for UK£177k worth of shares at a price of UK£2.16 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (UK£1.15). So it is hard to draw any strong conclusion from it.

In the last twelve months insiders purchased 64.20k shares for UK£125k. On the other hand they divested 506596 shares, for UK£1.0m. In total, Royal Bank of Scotland Group insiders sold more than they bought over the last year. They sold for an average price of about UK£1.98. We are not joyful about insider selling. But the selling was at much higher prices than the current share price (UK£1.15), so it probably doesn't tell us a lot about the value on offer today. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Royal Bank of Scotland 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.

Insiders at Royal Bank of Scotland Group Have Sold Stock Recently

We've seen more insider selling than insider buying at Royal Bank of Scotland Group recently. In that time, insiders dumped UK£128k worth of shares. On the flip side, insiders spent UK£30k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Does Royal Bank of Scotland 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 our data, it seems that Royal Bank of Scotland Group insiders own 0.03% of the company, worth about UK£4.1m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Royal Bank of Scotland Group Insiders?

The insider sales have outweighed the insider buying, at Royal Bank of Scotland Group, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Royal Bank of Scotland Group makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we're a little wary. As the saying goes, only fools rush in. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 4 warning signs we've spotted with Royal Bank of Scotland Group (including 1 which is potentially serious).

Of course Royal Bank of Scotland 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.