Multiple Insiders Sold Serko Shares Presenting Weak Signs For Investors

Quite a few Serko Limited (NZSE:SKO) insiders sold their shares over the past year, which may be a cause for concern. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Serko

The Last 12 Months Of Insider Transactions At Serko

Over the last year, we can see that the biggest insider sale was by the Independent Non-Executive Director, Clyde McConaghy, for NZ$123k worth of shares, at about NZ$3.57 per share. That means that an insider was selling shares at around the current price of NZ$3.33. 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.

Serko insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Have Serko Insiders Traded Recently?

In the last quarter Independent Non-Executive Chairperson Claudia Batten sold NZ$447 worth of equity. That's not a lot. Ultimately the overall selling isn't enough to tell us much.

Insider Ownership Of Serko

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. It appears that Serko insiders own 30% of the company, worth about NZ$122m. 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 Does This Data Suggest About Serko Insiders?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. While we feel good about high insider ownership of Serko, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Serko has 1 warning sign we think you should be aware of.

But note: Serko 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.