Stock Analysis

Synlait Milk Limited (NZSE:SML) insiders made a handsome profit after selling stock presently valued at NZ$3.56 apiece for NZ$5.23

  •  Updated
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Despite the fact that Synlait Milk Limited (NZSE:SML) stock rose 13% last week, insiders who sold NZ$154k worth of stock in the previous 12 months are likely to be better off. Selling at an average price of NZ$5.23, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Synlait Milk

Synlait Milk Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Roger Schwarzenbach, for NZ$99k worth of shares, at about NZ$5.09 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of NZ$3.56. So it may not shed much light on insider confidence at current levels.

Synlait Milk insiders didn't buy any shares 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!

NZSE:SML Insider Trading Volume September 27th 2021

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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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 3.4% of Synlait Milk shares, worth about NZ$26m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Synlait Milk Insiders?

It doesn't really mean much that no insider has traded Synlait Milk shares in the last quarter. Still, the insider transactions at Synlait Milk in the last 12 months are not very heartening. But it's good to see that insiders own shares in the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for Synlait Milk (of which 1 is significant!) you should know about.

But note: Synlait Milk 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, but not derivative transactions.

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