Atlas Copco Insiders Sell kr50m Of Stock, Possibly Signalling Caution

In the last year, many Atlas Copco AB (STO:ATCO A) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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 Atlas Copco

The Last 12 Months Of Insider Transactions At Atlas Copco

Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Hans Straberg, for kr46m worth of shares, at about kr147 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of kr179. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 54% of Hans Straberg's stake.

In the last twelve months insiders purchased 2.82k shares for kr380k. But insiders sold 342.04k shares worth kr50m. All up, insiders sold more shares in Atlas Copco than they bought, over the last year. The sellers received a price of around kr147, on average. We don't gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are 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. We usually like to see fairly high levels of insider ownership. Atlas Copco insiders own about kr336m worth of shares. That equates to 0.04% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Atlas Copco Insiders?

The fact that there have been no Atlas Copco insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Atlas Copco, we can't say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in Atlas Copco, you should check out this free report on analyst forecasts for the company.

But note: Atlas Copco 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.