Don't Ignore The Fact That This Insider Just Sold Some Shares In StepStone Group Inc. (NASDAQ:STEP)

By
Simply Wall St
Published
November 24, 2021
NasdaqGS:STEP
Source: Shutterstock

Some StepStone Group Inc. (NASDAQ:STEP) shareholders may be a little concerned to see that insider James Lim recently sold a substantial US$21m worth of stock at a price of US$51.83 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 5.1%.

View our latest analysis for StepStone Group

StepStone Group Insider Transactions Over The Last Year

Notably, that recent sale by James Lim is the biggest insider sale of StepStone Group shares that we've seen in the last year. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$43.00). So it may not tell us anything about how insiders feel about the current share price.

The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NasdaqGS:STEP Insider Trading Volume November 25th 2021

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

Insider Ownership of StepStone Group

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. StepStone Group insiders own about US$560m worth of shares (which is 12% 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.

So What Does This Data Suggest About StepStone Group Insiders?

An insider sold StepStone Group shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since StepStone Group is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 4 warning signs with StepStone Group and understanding these should be part of your investment process.

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, but not derivative transactions.

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