Signet Jewelers Insiders Sold US$3.2m Of Shares Suggesting Hesitancy

The fact that multiple Signet Jewelers Limited (NYSE:SIG) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Signet Jewelers

The Last 12 Months Of Insider Transactions At Signet Jewelers

Over the last year, we can see that the biggest insider sale was by the Chief Digital Innovation Officer & President of Digital Banners, Oded Edelman, for US$731k worth of shares, at about US$73.14 per share. That means that even when the share price was below the current price of US$96.06, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 5.0% of Oded Edelman's holding.

In the last year Signet Jewelers insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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).

Signet Jewelers Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Signet Jewelers. Specifically, Chief Supply Chain Officer Stephen Lovejoy ditched US$222k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Signet Jewelers Boast High 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. Signet Jewelers insiders own 3.6% of the company, currently worth about US$153m based on the recent share price. 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 Signet Jewelers Tell Us?

An insider hasn't bought Signet Jewelers stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Signet Jewelers 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. Of course, the future is what matters most. So if you are interested in Signet Jewelers, you should check out this free report on analyst forecasts for the company.

Of course Signet Jewelers 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.