Creightons Insiders Made A Wise Decision By Selling UK£2.8m Worth Of Stock

While Creightons Plc (LON:CRL) shareholders have enjoyed a good week with stock up 26%, they need remain vigilant. The fact that insiders chose to dispose of UK£2.8m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Creightons

The Last 12 Months Of Insider Transactions At Creightons

The Non-Executive Director, William Mcilroy, made the biggest insider sale in the last 12 months. That single transaction was for UK£2.8m worth of shares at a price of UK£0.26 each. That means that even when the share price was below the current price of UK£0.34, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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 66% of William Mcilroy's holding. The only individual insider seller over the last year was William Mcilroy.

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).

Are Creightons Insiders Buying Or Selling?

We've only seen a tiny insider purchase valued at UK£3.7k, in the last three months. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Creightons insiders own about UK£5.8m worth of shares. That equates to 25% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Creightons Tell Us?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. Our analysis of Creightons insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Creightons. Our analysis shows 3 warning signs for Creightons (1 is potentially serious!) and we strongly recommend you look at them before investing.

Of course Creightons 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.