Don't Ignore The Insider Selling In Santova

We'd be surprised if Santova Limited (JSE:SNV) shareholders haven't noticed that the Executive Director, Anthony van Zyl, recently sold R3.0m worth of stock at R7.50 per share. However, the silver lining is that the sale only reduced their total holding by 2.4%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Santova

The Last 12 Months Of Insider Transactions At Santova

In fact, the recent sale by Anthony van Zyl was the biggest sale of Santova shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of R7.51. While we don't usually like to see insider selling, it's more concerning if the sales take place 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.

Over the last year, we can see that insiders have bought 161.02k shares worth R1.5m. But they sold 1.15m shares for R9.1m. All up, insiders sold more shares in Santova than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Does Santova Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 25% of Santova shares, worth about R243m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Santova Tell Us?

An insider sold Santova shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Santova. For example - Santova has 2 warning signs we think you should be aware of.

Of course Santova 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.