CEO, Member of the Management Board & Director Of AJ Bell Sold 43% Of Their Shares

We wouldn't blame AJ Bell plc (LON:AJB) shareholders if they were a little worried about the fact that Michael Summersgill, the CEO, Member of the Management Board & Director recently netted about UK£2.0m selling shares at an average price of UK£4.45. That's a big disposal, and it decreased their holding size by 43%, which is notable but not too bad.

View our latest analysis for AJ Bell

AJ Bell Insider Transactions Over The Last Year

In fact, the recent sale by Michael Summersgill was the biggest sale of AJ Bell shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at around the current price of UK£4.43. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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.

Happily, we note that in the last year insiders paid UK£226k for 62.34k shares. On the other hand they divested 960.11k shares, for UK£3.9m. Over the last year we saw more insider selling of AJ Bell shares, than buying. The sellers received a price of around UK£4.09, on average. It's not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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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. A high insider ownership often makes company leadership more mindful of shareholder interests. AJ Bell insiders own 20% of the company, currently worth about UK£366m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About AJ Bell Insiders?

The stark truth for AJ Bell is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that AJ Bell is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that AJ Bell has 2 warning signs and it would be unwise to ignore them.

Of course AJ Bell may not be the best stock to buy. So you may wish to see this free collection of high quality 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.