Have Grafton Group Insiders Been Selling Stock?

We'd be surprised if Grafton Group plc (LON:GFTU) shareholders haven't noticed that the Group CFO & Director, David Arnold, recently sold UK£305k worth of stock at UK£10.18 per share. That sale was 16% of their holding, so it does make us raise an eyebrow.

See our latest analysis for Grafton Group

The Last 12 Months Of Insider Transactions At Grafton Group

In fact, the recent sale by David Arnold was the biggest sale of Grafton Group shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of UK£9.92. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Happily, we note that in the last year insiders paid UK£44k for 4.38k shares. But insiders sold 65.23k shares worth UK£650k. David Arnold sold a total of 65.23k shares over the year at an average price of UK£9.97. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Grafton 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Grafton Group insiders own 11% of the company, worth about UK£224m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Grafton Group Insiders?

An insider sold Grafton Group shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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 1 warning sign with Grafton Group and understanding it should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.