Several Pennon Group Insiders Sell Shares Sending Potential Negative Signal

Pennon Group Plc (LON:PNN) shareholders may have reason to be concerned, as several insiders sold their shares over the past year. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Pennon Group

The Last 12 Months Of Insider Transactions At Pennon Group

The Group CEO & Executive Director, Susan Davy, made the biggest insider sale in the last 12 months. That single transaction was for UK£282k worth of shares at a price of UK£7.12 each. So we know that an insider sold shares at around the present share price of UK£6.89. 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.

Over the last year, we can see that insiders have bought 4.11k shares worth UK£30k. But insiders sold 50.04k shares worth UK£356k. In total, Pennon Group 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 Pennon Group better if I see some big insider buys. While we wait, check out this free list of growing companies 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Pennon Group insiders have about 0.1% of the stock, worth approximately UK£2.2m. I generally like to see higher levels of ownership.

So What Do The Pennon Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Pennon Group shares in the last quarter. Our analysis of Pennon Group insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pennon Group. Case in point: We've spotted 3 warning signs for Pennon Group you should be aware of, and 2 of these make us uncomfortable.

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 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.