Selling kr6.6m worth of stock earlier this year was a lucrative decision for Generic Sweden AB (STO:GENI) insiders

Even though Generic Sweden AB (STO:GENI) stock gained 16% last week, insiders who sold kr6.6m worth of stock over the past year are probably better off. Selling at an average price of kr93.50, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Our analysis indicates that GENI is potentially undervalued!

Generic Sweden Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Fredrik Svedberg, sold kr3.5m worth of shares at a price of kr85.00 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of kr38.00. So it may not tell us anything about how insiders feel about the current share price. Fredrik Svedberg was the only individual insider to sell over the last year.

Fredrik Svedberg ditched 70.57k shares over the year. The average price per share was kr93.50. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Generic Sweden better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Generic Sweden insiders own about kr279m worth of shares (which is 60% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Generic Sweden Tell Us?

It doesn't really mean much that no insider has traded Generic Sweden shares in the last quarter. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Generic Sweden insiders selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 3 warning signs for Generic Sweden you should be aware of, and 1 of them can't be ignored.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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.