Insiders At Standard Chartered Sold US$12m In Stock, Alluding To Potential Weakness

Over the past year, many Standard Chartered PLC (LON:STAN) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Standard Chartered

Standard Chartered Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Simon Cooper, sold UK£9.6m worth of shares at a price of UK£6.50 per share. That means that an insider was selling shares at slightly below the current price (UK£11.83). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was 98% of Simon Cooper's holding. Notably Simon Cooper was also the biggest buyer, having purchased UK£1.6m worth of shares.

Over the last year, we can see that insiders have bought 245.36k shares worth UK£1.6m. On the other hand they divested 1.73m shares, for UK£12m. In total, Standard Chartered insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Standard Chartered 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.

Does Standard Chartered Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Standard Chartered insiders own about UK£49m worth of shares. That equates to 0.2% 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 Does This Data Suggest About Standard Chartered Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Standard Chartered insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Standard Chartered.

But note: Standard Chartered 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 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.