Insider Stock Buying Reaches kr88.5m On H & M Hennes & Mauritz

Quite a few insiders have dramatically grown their holdings in H & M Hennes & Mauritz AB (publ) (STO:HM B) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for H & M Hennes & Mauritz

The Last 12 Months Of Insider Transactions At H & M Hennes & Mauritz

The Non-Independent Chairman Karl-Johan Persson made the biggest insider purchase in the last 12 months. That single transaction was for kr88m worth of shares at a price of kr175 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being kr160). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 506.00k shares for kr89m. On the other hand they divested 61.70k shares, for kr10m. Overall, H & M Hennes & Mauritz insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

H & M Hennes & Mauritz Insiders Bought Stock Recently

At H & M Hennes & Mauritz,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, two insiders bought kr89m worth of shares in that time. But we did see insider Niklas Zennstrom sell shares worth kr10m. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership

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's great to see that H & M Hennes & Mauritz insiders own 9.4% of the company, worth about kr24b. 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 Does This Data Suggest About H & M Hennes & Mauritz Insiders?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about H & M Hennes & Mauritz. Looks promising! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of H & M Hennes & Mauritz.

But note: H & M Hennes & Mauritz 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com