Don't Ignore The Insider Selling In Associated British Foods

Some Associated British Foods plc (LON:ABF) shareholders may be a little concerned to see that the CEO & Executive Director, George Weston, recently sold a substantial UK£1.2m worth of stock at a price of UK£21.61 per share. However, that sale only accounted for 1.4% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Associated British Foods

The Last 12 Months Of Insider Transactions At Associated British Foods

In fact, the recent sale by George Weston was the biggest sale of Associated British Foods 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£21.97, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 1.4% of George Weston's holding.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Associated British Foods insiders own about UK£98m worth of shares (which is 0.6% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Associated British Foods Tell Us?

An insider sold Associated British Foods shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Associated British Foods is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. You'd be interested to know, that we found 2 warning signs for Associated British Foods and we suggest you have a look.

Of course Associated British Foods 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.