We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we’ll take a look at whether insiders have been buying or selling shares in Wallenstam AB (publ) (STO:WALL 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 on the market. 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 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’.
Wallenstam Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Marina Fritsche bought kr2.0m worth of shares at a price of kr81.90 per share. That implies that an insider found the current (approximate) price enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Over the last year, we can see that insiders have bought 47.00k shares worth kr3.8m. Overall, Wallenstam insiders were net buyers last year. The average buy price was around kr80.48. Although they bought at below the recent price of kr94.15 per share, it is good to see that insiders are willing to invest in the company. 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!
Wallenstam is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Have Wallenstam Insiders Traded Recently?
We saw some Wallenstam insider buying shares in the last three months. Marina Fritsche shelled out kr88k for shares in that time. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Wallenstam Boast High Insider Ownership?
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’s great to see that Wallenstam insiders own 27% of the company, worth about kr8.2b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Wallenstam Insider Transactions Indicate?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Wallenstam insiders are well aligned, and quite possibly think the share price is too low. That’s what I like to see! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Wallenstam.
But note: Wallenstam 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.