Standard Chartered Insiders Sold US$12m Of Shares Suggesting Hesitancy

In the last year, many Standard Chartered PLC (LON:STAN) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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.

See our latest analysis for Standard Chartered

The Last 12 Months Of Insider Transactions At Standard Chartered

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 even when the share price was below the current price of UK£7.16, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. 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. But insiders sold 1.86m shares worth UK£12m. Over the last year we saw more insider selling of Standard Chartered shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Standard Chartered Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Standard Chartered. In total, President of International Pi-Cheng Hung sold UK£1.9m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Standard Chartered

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. It appears that Standard Chartered insiders own 0.2% of the company, worth about UK£32m. 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 Standard Chartered Insider Transactions Indicate?

An insider sold Standard Chartered shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Standard Chartered makes money, and is growing profits. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Standard Chartered.

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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.

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