City of London Investment Group PLC (LON:CLIG) Insiders Have Been Selling

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in City of London Investment Group PLC (LON:CLIG).

What Is Insider Selling?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for City of London Investment Group

The Last 12 Months Of Insider Transactions At City of London Investment Group

The Founder & Advisor, Barry Olliff, made the biggest insider sale in the last 12 months. That single transaction was for UK£504k worth of shares at a price of UK£4.58 each. That means that even when the share price was below the current price of UK£5.56, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 5.5% of Barry Olliff's holding. Barry Olliff was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 87.74k shares for UK£355k. But insiders sold 169.39k shares worth UK£771k. Barry Olliff sold a total of 169.39k shares over the year at an average price of UK£4.55. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insiders at City of London Investment Group Have Bought Stock Recently

It's good to see that City of London Investment Group insiders have made notable investments in the company's shares. We can see that Independent Non-Executive Chairman Barry Aling paid UK£172k for shares in the company. No-one sold. This makes one think the business has some good points.

Does City of London Investment 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. City of London Investment Group insiders own about UK£106m worth of shares (which is 39% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About City of London Investment Group Insiders?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider suggests they are well aligned and optimistic. While we like knowing 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. To that end, you should learn about the 3 warning signs we've spotted with City of London Investment Group (including 1 which is a bit concerning).

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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