Insiders are probably glad they sold their shares in Halma plc (LON:HLMA) after 4.0% drop

By
Simply Wall St
Published
April 12, 2022
LSE:HLMA
Source: Shutterstock

Over the past year, insiders sold UK£314k worth of Halma plc (LON:HLMA) stock at an average price of UK£31.37 per share allowing them to get the most out of their money. The company's market valuation decreased by UK£390m after the stock price dropped 4.0% over the past week, but insiders were spared from painful losses.

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.

View our latest analysis for Halma

The Last 12 Months Of Insider Transactions At Halma

The Group Talent, Jennifer Ward, made the biggest insider sale in the last 12 months. That single transaction was for UK£314k worth of shares at a price of UK£31.37 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£24.42). So it may not tell us anything about how insiders feel about the current share price. Jennifer Ward was the only individual insider to sell shares in the last twelve months.

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!

insider-trading-volume
LSE:HLMA Insider Trading Volume April 12th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. It appears that Halma insiders own 0.3% of the company, worth about UK£31m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Halma Tell Us?

The fact that there have been no Halma insider transactions recently certainly doesn't bother us. Our analysis of Halma insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. 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. While conducting our analysis, we found that Halma has 2 warning signs and it would be unwise to ignore these.

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.

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