Admiral Group Insiders Sell UK£770k Of Stock, Possibly Signalling Caution

In the last year, many Admiral Group plc (LON:ADM) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Admiral Group

The Last 12 Months Of Insider Transactions At Admiral Group

In the last twelve months, the biggest single sale by an insider was when the Chief Executive Officer of UK Insurance, Cristina Nestares, sold UK£714k worth of shares at a price of UK£23.11 per share. That means that an insider was selling shares at slightly below the current price (UK£25.34). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 62% of Cristina Nestares's holding. Notably Cristina Nestares was also the biggest buyer, having purchased UK£282k worth of shares.

In the last twelve months insiders purchased 15.03k shares for UK£282k. But they sold 33.38k shares for UK£770k. Over the last year we saw more insider selling of Admiral Group shares, than buying. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Admiral Group insiders own about UK£522m worth of shares (which is 6.9% 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.

So What Does This Data Suggest About Admiral Group Insiders?

The fact that there have been no Admiral Group insider transactions recently certainly doesn't bother us. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Admiral Group insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Admiral Group. When we did our research, we found 2 warning signs for Admiral Group (1 is concerning!) that we believe deserve your full attention.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.