This Elementis Insider Reduced Their Stake By 18%

Insiders were net sellers of Elementis plc's (LON:ELM ) stock during the past year. That is, insiders sold more stock than they bought.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Elementis

The Last 12 Months Of Insider Transactions At Elementis

The Group CEO & Executive Director, Paul Waterman, made the biggest insider sale in the last 12 months. That single transaction was for UK£524k worth of shares at a price of UK£1.50 each. That means that even when the share price was below the current price of UK£1.60, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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 only 18% of Paul Waterman's holding. The only individual insider seller over the last year was Paul Waterman.

Paul Waterman sold a total of 578.84k shares over the year at an average price of US$1.47. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Elementis better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Elementis Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at Elementis. Specifically, Group CEO & Executive Director Paul Waterman ditched UK£524k 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 Elementis Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Elementis insiders have about 0.4% of the stock, worth approximately UK£3.4m. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Elementis Tell Us?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insiders own relatively few shares in the company, and when you consider the sales, we're not particularly excited about the stock. So we'd only buy after very careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Elementis has 1 warning sign we think you should be aware of.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.