Did Close Brothers Group plc (LON:CBG) Insiders Sell Shares?

By
Simply Wall St
Published
January 27, 2020
LSE:CBG

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Close Brothers Group plc (LON:CBG).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

Check out our latest analysis for Close Brothers Group

The Last 12 Months Of Insider Transactions At Close Brothers Group

In the last twelve months, the biggest single sale by an insider was when the CEO & Director, Preben Prebensen, sold UK£3.1m worth of shares at a price of UK£13.09 per share. That means that an insider was selling shares at slightly below the current price (UK£14.90). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 50% of Preben Prebensen's holding.

In total, Close Brothers Group insiders sold more than they bought over the last year. You can see the insider transactions (by 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:CBG Recent Insider Trading, January 27th 2020
LSE:CBG Recent Insider Trading, January 27th 2020

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

Insiders at Close Brothers Group Have Sold Stock Recently

Over the last three months, we've seen notably more insider selling, than insider buying, at Close Brothers Group. We note insiders cashed in UK£2.2m worth of shares. On the flip side, insider Robert Sack spent UK£144k on purchasing shares (as mentioned above) . Generally this level of net selling might be considered a bit bearish.

Insider Ownership of Close Brothers Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Close Brothers Group insiders own 0.2% of the company, worth about UK£3.8m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Close Brothers Group Tell Us?

The insider sales have outweighed the insider buying, at Close Brothers Group, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly think twice before buying! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Close Brothers Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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