Insiders at Smiths Group plc (LON:SMIN) may have anticipated downturn, sold UK£543k worth of stock despite low prices

By
Simply Wall St
Published
August 10, 2021
LSE:SMIN
Source: Shutterstock

Despite the fact that Smiths Group plc's (LON:SMIN) value has dropped 8.7% in the last week insiders who sold UK£543k worth of stock in the past 12 months have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of UK£13.75 is still lower than the current share price.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Smiths Group

The Last 12 Months Of Insider Transactions At Smiths Group

Over the last year, we can see that the biggest insider sale was by the insider, Andrew Smith, for UK£376k worth of shares, at about UK£13.75 per share. That means that an insider was selling shares at slightly below the current price (UK£14.36). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 only 7.7% of Andrew Smith's holding.

All up, insiders sold more shares in Smiths Group than they bought, over the last year. 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!

insider-trading-volume
LSE:SMIN Insider Trading Volume August 10th 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Smiths Group Insiders Bought Stock Recently

We saw some Smiths Group insider buying shares in the last three months. Independent Chairman of the Board George Buckley shelled out UK£12k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does Smiths Group Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company 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. From our data, it seems that Smiths Group insiders own 0.1% of the company, worth about UK£6.2m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Smiths Group Tell Us?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. The insider transactions at Smiths Group are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. 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. For example - Smiths Group has 2 warning signs we think you should be aware of.

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, but not derivative transactions.

If you decide to trade Smiths Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


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

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.