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We've lost count of how many times insiders have
accumulated shares in a company that goes on to improve markedly.
On the other hand, we'd be remiss not to mention that insider sales
have been known to precede tough periods for a business. So we'll
take a look at whether insiders have been buying or selling shares
in Smith & Nephew plc (LON:SN.).
It's quite normal to see company insiders, such
as board members, trading in company stock, from time to time.
However, most countries require that the company discloses such
transactions to the market.
We don't think shareholders should simply follow
insider transactions. But logic dictates you should pay some
attention to whether insiders are buying or selling shares. 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
View our latest analysis
for Smith & Nephew
Over the last year, we can see that the biggest
insider sale was by the , Rodrigo Bianchi, for UKÂ£1.5m worth of
shares, at about UKÂ£13.93 per share. That means that an insider was
selling shares at slightly below the current price (UKÂ£16.93). We
generally consider it a negative if insiders have been selling on
market, especially if they did so below the current price, because
it implies that they considered a lower price to be reasonable.
Please do note, however, that sellers may have a variety of reasons
for selling, so we don't know for sure what they think of the stock
price. This single sale was 68.9% of Rodrigo Bianchi's stake. The
only individual insider seller over the last year was Rodrigo
In the last twelve months insiders purchased 5976
shares for UKÂ£82k. But insiders sold 157k shares worth UKÂ£2.2m.
Rodrigo Bianchi ditched 157k shares over the year. The average
price per share was US$13.92. The chart below shows insider
transactions (by individuals) over the last year. By clicking on
the graph below, you can see the precise details of each insider
I will like Smith & Nephew better if I see
some big insider buys. While we wait, check out this
free list of growing companies
with considerable, recent, insider buying.
Many investors like to check how much of a
company is owned by insiders. A high insider ownership often makes
company leadership more mindful of shareholder interests. It
appears that Smith & Nephew insiders own 0.08% of the company,
worth about UKÂ£11m. We've certainly seen higher levels of insider
ownership elsewhere, but these holdings are enough to suggest
alignment between insiders and the other shareholders.
The fact that there have been no Smith &
Nephew insider transactions recently certainly doesn't bother us.
Still, the insider transactions at Smith & Nephew in the last
12 months are not very heartening. But we do like the fact that
insiders own a fair chunk of the company. Therefore, you should
should definitely take a look at this FREE
report showing analyst
forecasts for Smith & Nephew.
Of course Smith & Nephew may not be
the best stock to buy. So you may wish to see this
free collection of high quality
For the purposes of this article, insiders
are those individuals who report their transactions to the relevant
We aim to bring you long-term focused research
analysis driven by fundamental data. Note that our analysis may not
factor in the latest price-sensitive company announcements or
qualitative material.If you spot an error that warrants correction, please contact
the editor at
[email protected] 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.