Possible Bearish Signals With Bergman & Beving Insiders Disposing Stock

Quite a few Bergman & Beving AB (publ) (STO:BERG B) insiders sold their shares over the past year, which may be a cause for concern. 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, 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.

Check out our latest analysis for Bergman & Beving

The Last 12 Months Of Insider Transactions At Bergman & Beving

The Division Head of Core Solutions, Mats Gullbrandsson, made the biggest insider sale in the last 12 months. That single transaction was for kr4.4m worth of shares at a price of kr291 each. That means that even when the share price was slightly below the current price of kr295, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 67% of Mats Gullbrandsson's holding.

Over the last year, we can see that insiders have bought 5.25k shares worth kr1.6m. But insiders sold 45.90k shares worth kr14m. Over the last year we saw more insider selling of Bergman & Beving shares, than buying. 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!

I will like Bergman & Beving better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Bergman & Beving Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Bergman & Beving shares over the last three months. In that time, Division Head of Core Solutions Mats Gullbrandsson dumped kr4.4m worth of shares. On the other hand we note insiders bought kr1.6m worth of shares , as previously mentioned . Generally this level of net selling might be considered a bit bearish.

Insider Ownership Of Bergman & Beving

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Bergman & Beving insiders own about kr399m worth of shares. That equates to 5.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Bergman & Beving Tell Us?

Unfortunately, there has been more insider selling of Bergman & Beving stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Bergman & Beving is growing earnings. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. While it's good to be aware of 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. You'd be interested to know, that we found 2 warning signs for Bergman & Beving and we suggest you have a look.

But note: Bergman & Beving 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.