We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in SkiStar AB (publ) ( STO:SKIS B ).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At SkiStar
Director Per-Uno Sandberg made the biggest insider sale in the last 12 months. That single transaction was for kr19m worth of shares at a price of kr97.00 each. That means that even when the share price was below the current price of kr109, an insider wanted to cash in some shares. Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. As a general rule we consider it to be discouraging when insiders are selling below the current price. Please note, however, that this single sale was just 10.6% of Per-Uno Sandberg’s stake.
Over the last year, we note insiders sold 299.67k shares worth kr32m. In total, SkiStar insiders sold more than they bought over the last year. They sold for an average price of about kr106. We don’t gain much confidence from insider selling near the recent share price. But we don’t put too much weight on the insider selling, since sellers could have personal reasons. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like SkiStar better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does SkiStar Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. SkiStar insiders own 50% of the company, currently worth about kr4.2b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At SkiStar Tell Us?
It doesn’t really mean much that no insider has traded SkiStar shares in the last quarter. While we feel good about high insider ownership of SkiStar, we can’t say the same about the selling of shares. Of course, the future is what matters most . So if you are interested in SkiStar, you should check out this free report on analyst forecasts for the company .
Of course SkiStar may not be the best stock to buy . So you may wish to see this free collection of high quality companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.