Investec Group Insider Lowered Holding By 100% During Last Year

Viewing insider transactions for Investec Group's (JSE:INL ) over the last year, we see that insiders were net sellers. This means that a larger number of shares were sold by insiders in relation to shares purchased.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Investec Group

Investec Group Insider Transactions Over The Last Year

Notably, that recent sale by insider Richard Wainwright was not the only time they sold Investec Group shares this year. Earlier in the year, they fetched R101 per share in a -R10m sale. That means that even when the share price was below the current price of R105, 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 100% of Richard Wainwright's holding.

Richard Wainwright divested 114.65k shares over the last 12 months at an average price of UK£102. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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

Investec Group Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Investec Group shares. In total, insider Richard Wainwright sold R1.6m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does Investec Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Investec Group insiders own 3.5% of the company, currently worth about R3.3b 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.

So What Do The Investec Group Insider Transactions Indicate?

An insider sold Investec Group shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But it is good to see that Investec Group is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for Investec Group (of which 1 is a bit unpleasant!) you should know about.

But note: Investec Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 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.