Did Midsona AB (publ) (STO:MSON B) Insiders Sell Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Midsona AB (publ) (STO:MSON B).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Midsona

Midsona Insider Transactions Over The Last Year

The Chief Financial Officer, Lennart Svensson, made the biggest insider sale in the last 12 months. That single transaction was for kr2.2m worth of shares at a price of kr64.34 each. So it's clear an insider wanted to take some cash off the table, even below the current price of kr68.00. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 38% of Lennart Svensson's stake.

Over the last year we saw more insider selling of Midsona shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Midsona better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insiders at Midsona Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Midsona. kr675k worth of shares were sold by insider Markku Janhunen. But the good news is that there was purchasing too (as previously mentioned) , worth kr265k. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership of Midsona

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Midsona insiders own 3.7% of the company, worth about kr159m. 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 Midsona Insiders?

The insider sales have outweighed the insider buying, at Midsona, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Midsona makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 4 warning signs for Midsona that deserve your attention before buying any shares.

But note: Midsona 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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This article by Simply Wall St is general in nature. 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.
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