Don't Ignore The Insider Selling In Velocity Composites

We note that the Velocity Composites plc (LON:VEL) Co-Founder, Jonathan Bridges, recently sold UK£50k worth of stock for UK£0.15 per share. On the bright side, that's just a small sale and only reduced their holding by 6.2%.

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Velocity Composites Insider Transactions Over The Last Year

Notably, that recent sale by Jonathan Bridges is the biggest insider sale of Velocity Composites shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (UK£0.16). 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. We note that the biggest single sale was only 6.2% of Jonathan Bridges's holding.

In total, Velocity Composites insiders sold more than they bought over the last year. 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!

Check out our latest analysis for Velocity Composites

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Does Velocity Composites Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Velocity Composites insiders own 26% of the company, worth about UK£2.3m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Velocity Composites Insider Transactions Indicate?

We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we're not concerned. Recent insider selling makes us a little nervous, in light of the broader picture of Velocity Composites insider transactions. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Velocity Composites. Every company has risks, and we've spotted 4 warning signs for Velocity Composites you should know about.

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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.