One Vodacom Group Limited (JSE:VOD) insider reduced their stake by 3.2% in the previous year

By
Simply Wall St
Published
March 17, 2022
JSE:VOD
Source: Shutterstock

From what we can see, insiders were net sellers in Vodacom Group Limited's (JSE:VOD ) during the past 12 months. That is, insiders sold the stock in greater numbers than they purchased it.

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 Vodacom Group

The Last 12 Months Of Insider Transactions At Vodacom Group

The CEO & Executive Director, Mohamed Shameel Joosub, made the biggest insider sale in the last 12 months. That single transaction was for R7.1m worth of shares at a price of R136 each. That means that an insider was selling shares at slightly below the current price (R155). 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 only 3.2% of Mohamed Shameel Joosub's holding. Mohamed Shameel Joosub was the only individual insider to sell 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
JSE:VOD Insider Trading Volume March 17th 2022

I will like Vodacom 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.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Vodacom Group insiders own about R254m worth of shares. That equates to 0.1% of the company. 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 Does This Data Suggest About Vodacom Group Insiders?

The fact that there have been no Vodacom Group insider transactions recently certainly doesn't bother us. While we feel good about high insider ownership of Vodacom Group, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Vodacom Group. In terms of investment risks, we've identified 2 warning signs with Vodacom Group and understanding them should be part of your investment process.

But note: Vodacom 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, but not derivative transactions.

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