Selling kr120m Of Stock Was Lucrative Decision For NOTE Insiders

While it’s been a great week for NOTE AB (publ) (STO:NOTE) shareholders after stock gained 10%, they should consider it with a grain of salt. In spite of the relatively cheap prices, insiders made the decision to sell kr120m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At NOTE

Over the last year, we can see that the biggest insider sale was by the Director, Johan Hagberg, for kr110m worth of shares, at about kr153 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of kr179. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 12% of Johan Hagberg's holding. Notably Johan Hagberg was also the biggest buyer, having purchased kr1.5m worth of shares.

Happily, we note that in the last year insiders paid kr1.5m for 11.35k shares. On the other hand they divested 793.30k shares, for kr120m. In total, NOTE insiders sold more than they bought over the last year. 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!

See our latest analysis for NOTE

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Does NOTE Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. NOTE insiders own 30% of the company, currently worth about kr1.5b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At NOTE Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of NOTE insider transactions don't fill us with confidence. Of course, the future is what matters most. So if you are interested in NOTE, you should check out this free report on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.