Those following along with Unilever PLC (LON:ULVR) will no doubt be intrigued by the recent purchase of shares by Graeme Pitkethly, CFO & Executive Director of the company, who spent a stonking UK£750k on stock at an average price of UK£40.86. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 11%.
The Last 12 Months Of Insider Transactions At Unilever
In fact, the recent purchase by CFO & Executive Director Graeme Pitkethly was not their only trade of Unilever shares this year. Earlier in the year, they sold shares at a price ofUK£45.39 per share in a -UK£2.1m transaction. So what is clear is that an insider saw fit to sell at around the current price of UK£41.51. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Happily, we note that in the last year insiders paid UK£914k for 22.49k shares. But insiders sold 47.24k shares worth UK£2.1m. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Unilever better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Unilever Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.04% of Unilever shares, worth about UK£44m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Unilever Tell Us?
The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. While recent transactions indicate confidence in Unilever, insiders don't own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. 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. Every company has risks, and we've spotted 2 warning signs for Unilever you should know about.
But note: Unilever 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.
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