Possible Bearish Signals With Holmen Insiders Disposing Stock

The fact that multiple Holmen AB (publ) (STO:HOLM B) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. 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.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Holmen

The Last 12 Months Of Insider Transactions At Holmen

The President, Henrik Sjolund, made the biggest insider sale in the last 12 months. That single transaction was for kr6.8m worth of shares at a price of kr457 each. That means that an insider was selling shares at around the current price of kr425. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

All up, insiders sold more shares in Holmen than they bought, 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Holmen Insiders Are Selling The Stock

The last three months saw some Holmen insider selling. Senior Vice President of Paperboard Johan Nellbeck sold kr198k worth of shares in that time. But the good news is that there was purchasing too , worth kr77k. 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 Holmen

For a common shareholder, it is worth checking how many shares are held by company insiders. 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 Holmen insiders own 1.5% of the company, worth about kr1.0b. 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 Do The Holmen Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Holmen, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since Holmen is profitable and growing, we're not too worried by this. 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. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Holmen. For instance, we've identified 2 warning signs for Holmen (1 is concerning) you should be aware of.

Of course Holmen may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.