Stock Analysis

As Smurfit Kappa Group Plc's (ISE:SK3)) market cap dropped by €553m, insiders who sold €4.9m worth of stock were able to offset their losses

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Insiders at Smurfit Kappa Group Plc (ISE:SK3) sold €4.9m worth of stock at an average price of €34.76 a share over the past year, making the most of their investment. The company's market worth decreased by €553m over the past week after the stock price dropped 6.1%, although insiders were able to minimize their 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 Smurfit Kappa Group

The Last 12 Months Of Insider Transactions At Smurfit Kappa Group

Over the last year, we can see that the biggest insider sale was by the Independent Non-Executive Director, James Lawrence, for €4.9m worth of shares, at about €35.02 per share. That means that an insider was selling shares at around the current price of €33.30. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. James Lawrence was the only individual insider to sell over the last year.

In the last twelve months insiders purchased 6.95k shares for €251k. But insiders sold 140.00k shares worth €4.9m. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

ISE:SK3 Insider Trading Volume March 17th 2023

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Does Smurfit Kappa Group Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.6% of Smurfit Kappa Group shares, worth about €53m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Smurfit Kappa Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Smurfit Kappa Group shares in the last quarter. Our analysis of Smurfit Kappa Group insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. To that end, you should learn about the 3 warning signs we've spotted with Smurfit Kappa Group (including 1 which makes us a bit 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, but not derivative transactions.

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