We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
The Last 12 Months Of Insider Transactions At Unilever
Douglas Baillie made the biggest insider sale in the last 12 months. That single transaction was for UK£466k worth of shares at a price of UK£40.14 each. That means that even when the share price was below the current price of UK£42.69, an insider wanted to cash in some shares. While their view may have changed since they sold, this isn’t a particularly bullish sign. When an insider sells below the current price, it does tend to make us wonder about the current valuation. It is worth noting that this sale was only 12.7% of Douglas Baillie’s holding.
Over the last year we saw more insider selling of Unilever shares, than buying. The average sell price was around €40.24. It’s not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see the insider transactions (by 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!
Unilever is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Unilever Have Bought Stock Recently
It’s good to see that Unilever insiders have made notable investments in the company’s shares. Xuezheng Z. Ma spent €42k on stock, and there wasn’t any selling. This is a positive in our book as it implies some confidence.
Does Unilever 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. Insiders own 0.04% of Unilever shares, worth about UK£43m. 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 Unilever Tell Us?
Our data shows a little more insider buying than selling in the last three months. But the difference isn’t much. We don’t take much encouragement from the transactions by Unilever insiders. But it’s good to see that insiders own shares in the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.