- United Kingdom
Bango PLC's (LON:BGO) insiders who sold earlier this year may be offered solace in this recent price drop
Bango PLC's (LON:BGO) value has fallen 11% in the last week, but insiders who sold US$4.4m 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 US$2.27 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.
Check out our latest analysis for Bango
Bango Insider Transactions Over The Last Year
The Founder, Anil Malhotra, made the biggest insider sale in the last 12 months. That single transaction was for UK£3.0m worth of shares at a price of UK£2.28 each. That means that even when the share price was below the current price of UK£2.34, an insider wanted to cash in some shares. 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. It is worth noting that this sale was only 34% of Anil Malhotra's holding.
In total, Bango 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 Bango better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders At Bango Have Sold Stock Recently
There was substantially more insider selling, than buying, of Bango shares over the last three months. In total, insiders sold UK£4.4m worth of shares in that time. On the other hand we note Independent Non-Executive Director Frank Bury bought UK£225k worth of shares , as previously mentioned . Generally this level of net selling might be considered a bit bearish.
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. It appears that Bango insiders own 12% of the company, worth about UK£22m. 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 Bango Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at Bango, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with Bango and understanding them should be part of your investment process.
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, but not derivative transactions.
Valuation is complex, but we're helping make it simple.
Find out whether Bango is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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.
Bango plc, together with its subsidiaries, develops, markets, and sells technology that enables the marketing and sale of products and services to mobile phone users.
Flawless balance sheet and slightly overvalued.