Possible Bearish Signals With Sirius Real Estate Insiders Disposing Stock

Many Sirius Real Estate Limited (LON:SRE) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Sirius Real Estate

The Last 12 Months Of Insider Transactions At Sirius Real Estate

Over the last year, we can see that the biggest insider sale was by the CEO & Executive Director, Andrew Coombs, for UK£3.8m worth of shares, at about UK£0.98 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of UK£0.84. So it is hard to draw any strong conclusion from it. Notably Andrew Coombs was also the biggest buyer, having purchased UK£3.7m worth of shares.

In the last twelve months insiders purchased 4.24m shares for UK£3.7m. But they sold 3.96m shares for UK£3.9m. In total, Sirius Real Estate insiders sold more than they bought over the last year. 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!

I will like Sirius Real Estate 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 Sirius Real Estate Have Bought Stock Recently

It's good to see that Sirius Real Estate insiders have made notable investments in the company's shares. Overall, five insiders shelled out UK£159k for shares in the company -- and none sold. That shows some optimism about the company's future.

Does Sirius Real Estate 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. We usually like to see fairly high levels of insider ownership. It appears that Sirius Real Estate insiders own 2.4% of the company, worth about UK£30m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Sirius Real Estate Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. But we can't say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Sirius Real Estate, 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Sirius Real Estate. To that end, you should learn about the 2 warning signs we've spotted with Sirius Real Estate (including 1 which is potentially serious).

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.

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.