Growthpoint Properties Limited's (JSE:GRT)) market cap declines to R43b but insiders who sold R19m stock were able to hedge their losses

Simply Wall St
March 10, 2022
Source: Shutterstock

By selling R19m worth of Growthpoint Properties Limited (JSE:GRT) stock at an average sell price of R13.33 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 7.5% last week, the company's market value declined by R3.5b, but insiders were able to mitigate their losses.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Growthpoint Properties

The Last 12 Months Of Insider Transactions At Growthpoint Properties

The Group CEO & Executive Director, Leon Sasse, made the biggest insider sale in the last 12 months. That single transaction was for R12m worth of shares at a price of R13.22 each. That means that an insider was selling shares at around the current price of R12.77. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Happily, we note that in the last year insiders paid R7.5m for 558.95k shares. But insiders sold 1.39m shares worth R19m. Over the last year we saw more insider selling of Growthpoint Properties shares, than buying. 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!

JSE:GRT Insider Trading Volume March 10th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that Growthpoint Properties insiders own 0.2% of the company, worth about R107m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Growthpoint Properties Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's great to see high levels of insider ownership, but looking back over the last year, we don't gain confidence from the Growthpoint Properties insiders selling. 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. Case in point: We've spotted 3 warning signs for Growthpoint Properties you should be aware of, and 2 of these are concerning.

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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.