Don't Ignore The Insider Selling In Sage Group

We wouldn't blame The Sage Group plc (LON:SGE) shareholders if they were a little worried about the fact that Aaron Harris, the Chief Technology Officer recently netted about UK£659k selling shares at an average price of UK£13.17. That's a big disposal, and it decreased their holding size by 18%, which is notable but not too bad.

Check out our latest analysis for Sage Group

The Last 12 Months Of Insider Transactions At Sage Group

Over the last year, we can see that the biggest insider sale was by the insider, Catherine Keers, for UK£1.7m worth of shares, at about UK£13.10 per share. That means that an insider was selling shares at below the current price (UK£13.15). 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. 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. It is worth noting that this sale was 73% of Catherine Keers's holding.

All up, insiders sold more shares in Sage Group 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership Of Sage Group

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. It appears that Sage Group insiders own 0.2% of the company, worth about UK£27m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Sage Group Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Sage Group makes money, and is growing profits. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. At Simply Wall St, we found 2 warning signs for Sage Group that deserve your attention before buying any shares.

Of course Sage Group 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.