Vunani Insiders Forfeit On 11% Gains After Selling Stock

Even though Vunani Limited (JSE:VUN) stock gained 11% last week, insiders who sold R3.8m worth of stock over the past year are probably better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of R2.59, which is higher than the current price, may have been the best decision.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Vunani

Vunani Insider Transactions Over The Last Year

The Non-Executive Director, Sithembiso Mthethwa, made the biggest insider sale in the last 12 months. That single transaction was for R2.5m worth of shares at a price of R2.50 each. 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 (R1.99). So it may not tell us anything about how insiders feel about the current share price.

Vunani insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like Vunani better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Vunani insiders own 20% of the company, worth about R64m. 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 Do The Vunani Insider Transactions Indicate?

The fact that there have been no Vunani insider transactions recently certainly doesn't bother us. Still, the insider transactions at Vunani in the last 12 months are not very heartening. But it's good to see that insiders own shares in 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. At Simply Wall St, we've found that Vunani has 4 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.