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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. 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 before you buy or sell Vitrolife AB (publ) (STO:VITR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Vitrolife
In the last twelve months, the biggest single sale by an insider was when the CFO & Investor Relations, Mikael Engblom, sold kr2.0m worth of shares at a price of kr201 per share. So we know that an insider sold shares at around the present share price of kr197. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Mikael Engblom was the only individual insider to sell over the last year. Notably Mikael Engblom was also the biggest buyer, having purchased kr645k worth of shares.
Happily, we note that in the last year insiders paid kr645k for 4064 shares. On the other hand they divested 10000 shares, for kr2.0m. You can see the insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Vitrolife Have Sold Stock Recently
There was substantially more insider selling, than buying, of Vitrolife shares over the last three months. In that time, Mikael Engblom dumped kr2.0m worth of shares. On the other hand we note insiders bought kr241k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Does Vitrolife 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. Insiders own 0.3% of Vitrolife shares, worth about kr59m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Vitrolife Insiders?
The stark truth for Vitrolife is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Vitrolife is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Vitrolife.
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 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@example.com. 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.