Have Insiders Been Selling Versarien plc (LON:VRS) Shares?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Versarien plc ( LON:VRS ), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Versarien

The Last 12 Months Of Insider Transactions At Versarien

Notably, that recent sale by Neill Ricketts is the biggest insider sale of Versarien shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (UK£0.57). 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. In this case, the company filing associated with the transaction indicates that it was in relation to a commitment in a divorce settlement. With that in mind, it is less concerning. Also, it is worth noting that this sale was only 11% of Neill Ricketts's holding.

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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at Versarien Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Versarien. Specifically, CEO & Executive Director Neill Ricketts had to sell UK£890k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Versarien 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. Versarien insiders own about UK£8.0m worth of shares. That equates to 7.4% 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 Versarien Tell Us?

An insider sold Versarien shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we're not rushing to buy, to say the least. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Versarien has 4 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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.

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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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. 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.
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