Mitie Group Insiders Sold UK£5.6m Of Shares Suggesting Hesitancy

The fact that multiple Mitie Group plc (LON:MTO) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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, we do think it is perfectly logical to keep tabs on what insiders are doing.

We've discovered 1 warning sign about Mitie Group. View them for free.

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. That means that even when the share price was below the current price of UK£1.53, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 33% of Phil Bentley's stake. Notably Phil Bentley was also the biggest buyer, having purchased UK£270k worth of shares.

Happily, we note that in the last year insiders paid UK£270k for 245.17k shares. But insiders sold 4.77m shares worth UK£5.6m. Over the last year we saw more insider selling of Mitie Group shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Mitie Group

I will like Mitie 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.

Does Mitie Group Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 appears that Mitie Group insiders own 1.3% of the company, worth about UK£24m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Mitie Group Insiders?

The fact that there have been no Mitie Group insider transactions recently certainly doesn't bother us. Our analysis of Mitie Group insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. 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 1 warning sign that you should run your eye over to get a better picture of Mitie Group.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.