Mitie Group Insiders Sell UK£5.6m Of Stock, Possibly Signalling Caution

Over the past year, many Mitie Group plc (LON:MTO) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Mitie Group

The Last 12 Months Of Insider Transactions At Mitie Group

In the last twelve months, the biggest single sale by an insider was when the CEO & Executive Director, Phil Bentley, sold UK£5.6m worth of shares at a price of UK£1.17 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£1.21. 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 only 33% of Phil Bentley's holding. Notably Phil Bentley was also the biggest buyer, having purchased UK£270k worth of shares.

In the last twelve months insiders purchased 245.17k shares for UK£270k. But they sold 4.77m shares for UK£5.6m. All up, insiders sold more shares in Mitie Group 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!

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

Insiders At Mitie Group Have Bought Stock Recently

It's good to see that Mitie Group insiders have made notable investments in the company's shares. We can see that CEO & Executive Director Phil Bentley paid UK£217k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership Of Mitie Group

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 Mitie Group insiders own 0.9% of the company, worth about UK£13m. 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 Mitie Group Insider Transactions Indicate?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Mitie Group, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. 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 Mitie Group and understanding this 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.