Need To Know: Hemfosa Fastigheter AB (publ) (STO:HEMF) Insiders Have Been Selling Shares

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Hemfosa Fastigheter AB (publ) (STO:HEMF).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

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. 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.’

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Hemfosa Fastigheter Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Bengt Kjell, for kr3.6m worth of shares, at about kr72.70 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of kr84.85. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it’s only a weak signal. This single sale was just 2.1% of Bengt Kjell’s stake.

In the last twelve months insiders purchased 6374 shares for kr622k. But insiders sold 57374 shares worth kr4.2m. All up, insiders sold more shares in Hemfosa Fastigheter than they bought, over the last year. They sold for an average price of about kr73.40. We don’t gain confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions (by 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!

OM:HEMF Recent Insider Trading, May 21st 2019
OM:HEMF Recent Insider Trading, May 21st 2019

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Have Hemfosa Fastigheter Insiders Traded Recently?

In the last three months, insiders sold kr118k. But that was only a smidgen more than the kr117k worth of buying. The net selling is so small that it’s hard to draw any conclusions from these recent transactions.

Insider Ownership of Hemfosa Fastigheter

Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Hemfosa Fastigheter insiders own 4.6% of the company, worth about kr656m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Hemfosa Fastigheter Tell Us?

Insider buying and selling have balanced each other out in the last three months, so we can’t deduct anything useful from these recent trades. It’s great to see high levels of insider ownership, but looking back at the last year, we’d need to see more buying to gain confidence from the Hemfosa Fastigheter insider transactions. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Hemfosa Fastigheter.

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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.