Have Henry Boot Insiders Been Selling Stock?

We wouldn't blame Henry Boot PLC (LON:BOOT) shareholders if they were a little worried about the fact that Jonathan Sykes, the Non-Independent Non-Executive Director recently netted about UK£492k selling shares at an average price of UK£2.05. However, that sale only accounted for 1.2% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Henry Boot

In fact, the recent sale by Jonathan Sykes was the biggest sale of Henry Boot shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of UK£2.08, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 1.2% of Jonathan Sykes's holding.

Happily, we note that in the last year insiders paid UK£105k for 57.43k shares. But they sold 390.00k shares for UK£792k. Jonathan Sykes ditched 390.00k shares over the year. The average price per share was UK£2.03. 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!

View our latest analysis for Henry Boot

I will like Henry Boot 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

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. Insiders own 27% of Henry Boot shares, worth about UK£75m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Henry Boot Tell Us?

An insider hasn't bought Henry Boot stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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. In terms of investment risks, we've identified 2 warning signs with Henry Boot and understanding them should be part of your investment process.

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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.