How Much Are BioGaia AB (publ) (STO:BIOG B) Insiders Taking Off The Table?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell BioGaia AB (publ) (STO:BIOG B), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for BioGaia

The Last 12 Months Of Insider Transactions At BioGaia

Over the last year, we can see that the biggest insider sale was by the Independent Deputy Board Chairman, David E. Dangoor, for kr10m worth of shares, at about kr507 per share. That means that even when the share price was slightly below the current price of kr517, an insider wanted to cash in some shares. 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. 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. We note that the biggest single sale was only 4.7% of David E. Dangoor's holding. David E. Dangoor was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 1.67k shares for kr616k. On the other hand they divested 26.02k shares, for kr13m. David E. Dangoor sold a total of 26.02k shares over the year at an average price of kr486. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

Insider Ownership of BioGaia

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that BioGaia insiders own 3.0% of the company, worth about kr317m. 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 BioGaia Insiders?

The fact that there have been no BioGaia insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of BioGaia, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing BioGaia. In terms of investment risks, we've identified 1 warning sign with BioGaia and understanding it should be part of your investment process.

But note: BioGaia 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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