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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Unilever PLC (LON:ULVR).
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, such insiders must disclose their trading activities, and not trade on inside information.
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. 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.’
Unilever Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the , Douglas Baillie, for UK£466k worth of shares, at about UK£40.14 per share. That means that even when the share price was below the current price of UK£49.67, 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 12.7% of Douglas Baillie’s stake.
Over the last year, we can see that insiders have bought 1002 shares worth UK£42k. But they sold 13208 for UK£534k. All up, insiders sold more shares in Unilever than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Have Unilever Insiders Traded Recently?
There was only a small bit of insider buying, worth €98.0, in the last three months. Looking at the net result, we don’t think these recent trades shed much light on how insiders, as a group, are feeling about the company’s prospects.
Insider Ownership of Unilever
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. Unilever insiders own about UK£63m worth of shares. That equates to 0.05% 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.
So What Does This Data Suggest About Unilever Insiders?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. Our analysis of Unilever insider transactions leaves us cautious. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Unilever.
Of course Unilever 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 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.