OCI Insiders Sell US$8.0m Of Stock, Possibly Signalling Caution

In the last year, many OCI N.V. (AMS:OCI) insiders sold a substantial stake in the company which may have sparked shareholders' attention. 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.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for OCI

The Last 12 Months Of Insider Transactions At OCI

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman, Nassef Onssy Sawiris, sold €2.5m worth of shares at a price of €30.85 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of €22.29. So it may not tell us anything about how insiders feel about the current share price.

All up, insiders sold more shares in OCI 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!

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

Does OCI Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. OCI insiders own 55% of the company, currently worth about €2.6b 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 OCI Insider Transactions Indicate?

It doesn't really mean much that no insider has traded OCI shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the OCI insiders selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing OCI. When we did our research, we found 3 warning signs for OCI (1 is a bit concerning!) that we believe deserve your full attention.

But note: OCI may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.