We wouldn't blame Stagecoach Group plc (LON:SGC) shareholders if they were a little worried about the fact that Brian Souter, the Non-Executive Director recently netted about UK£13m selling shares at an average price of UK£0.94. That's a big disposal, and it decreased their holding size by 14%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Stagecoach Group
Notably, that recent sale by Brian Souter is the biggest insider sale of Stagecoach Group shares that we've seen in the last year. That means that an insider was selling shares at around the current price of UK£0.92. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. Stagecoach Group insiders own 27% of the company, currently worth about UK£138m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Stagecoach Group Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Stagecoach Group stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. For instance, we've identified 2 warning signs for Stagecoach Group (1 is potentially serious) you should be aware of.
Of course Stagecoach 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, but not derivative transactions.
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