Read This Before Buying Klaria Pharma Holding AB (publ.) (STO:KLAR) Shares

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 Klaria Pharma Holding AB (publ.) (STO:KLAR), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Klaria Pharma Holding AB (publ.)

Klaria Pharma Holding AB (publ.) Insider Transactions Over The Last Year

The Chairman, Fredrik Hübinette, made the biggest insider sale in the last 12 months. That single transaction was for kr2.4m worth of shares at a price of kr6.30 each. So we know that an insider sold shares at around the present share price of kr6.08. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. The only individual insider seller over the last year was Fredrik Hübinette.

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 like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 17% of Klaria Pharma Holding AB (publ.) shares, worth about kr55m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Klaria Pharma Holding AB (publ.) Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Klaria Pharma Holding AB (publ.) shares in the last quarter. We don't take much encouragement from the transactions by Klaria Pharma Holding AB (publ.) insiders. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Klaria Pharma Holding AB (publ.) is showing 5 warning signs in our investment analysis, and 4 of those are concerning...

But note: Klaria Pharma Holding AB (publ.) 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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