Stock Analysis

InterContinental Hotels Group PLC's (LON:IHG)) market cap declines to UK£8.5b but insiders who sold US$2.4m stock were able to hedge their losses

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By selling US$2.4m worth of InterContinental Hotels Group PLC (LON:IHG) stock at an average sell price of US$50.61 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 4.8% last week, the company's market value declined by UK£428m, but insiders were able to mitigate their losses.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for InterContinental Hotels Group

The Last 12 Months Of Insider Transactions At InterContinental Hotels Group

Over the last year, we can see that the biggest insider sale was by the insider, Kenneth Macpherson, for UK£661k worth of shares, at about UK£50.61 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£46.66. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

In the last year InterContinental Hotels Group insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

LSE:IHG Insider Trading Volume January 25th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does InterContinental Hotels Group Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. InterContinental Hotels Group insiders own about UK£27m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The InterContinental Hotels Group Insider Transactions Indicate?

The fact that there have been no InterContinental Hotels Group insider transactions recently certainly doesn't bother us. We don't take much encouragement from the transactions by InterContinental Hotels Group insiders. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing InterContinental Hotels Group. For instance, we've identified 2 warning signs for InterContinental Hotels Group (1 makes us a bit uncomfortable) you should be aware of.

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, but not derivative transactions.

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