Insider Sellers Might Regret Selling Smiths News Shares at a Lower Price Than Current Market Value

Smiths News plc's (LON:SNWS) value has fallen 11% in the last week, but insiders who sold UK£1.0m worth of stock over the last year have had less success. Insiders would probably have been better off holding on to their shares given that the average selling price of UK£0.61 is still lower than the current share price.

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.

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The Last 12 Months Of Insider Transactions At Smiths News

The CEO & Executive Director, Jonathan Bunting, made the biggest insider sale in the last 12 months. That single transaction was for UK£717k worth of shares at a price of UK£0.61 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (UK£0.47). So it may not tell us anything about how insiders feel about the current share price. Jonathan Bunting was the only individual insider to sell shares in the last twelve months.

Jonathan Bunting sold a total of 1.67m shares over the year at an average price of UK£0.61. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Smiths News

I will like Smiths News 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.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£1.7m worth of Smiths News stock, about 1.5% of the company. We consider this fairly low insider ownership.

So What Do The Smiths News Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at Smiths News are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. 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. To help with this, we've discovered 3 warning signs (1 can't be ignored!) that you ought to be aware of before buying any shares in Smiths News.

Of course Smiths News may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.