Possible Bearish Signals With Heidrick & Struggles International Insiders Disposing Stock

Quite a few Heidrick & Struggles International, Inc. (NASDAQ:HSII) insiders sold their shares over the past year, which may be a cause for concern. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

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.

See our latest analysis for Heidrick & Struggles International

The Last 12 Months Of Insider Transactions At Heidrick & Struggles International

Over the last year, we can see that the biggest insider sale was by the Chief Human Resources Officer, Sarah Payne, for US$351k worth of shares, at about US$40.40 per share. That means that an insider was selling shares at slightly below the current price (US$42.28). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 36% of Sarah Payne's stake.

All up, insiders sold more shares in Heidrick & Struggles International than they bought, over the last year. You can see the insider transactions (by companies and 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!

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Does Heidrick & Struggles International 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Heidrick & Struggles International insiders own about US$19m worth of shares. That equates to 2.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Heidrick & Struggles International Insiders?

It doesn't really mean much that no insider has traded Heidrick & Struggles International shares in the last quarter. Still, the insider transactions at Heidrick & Struggles International in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Heidrick & Struggles International and understanding these should be part of your investment process.

Of course Heidrick & Struggles International may not be the best stock to buy. So you may wish to see this free collection of high quality 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.