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Don't Ignore The Insider Selling In AJ Bell

Simply Wall St · 06/01 07:46

Anyone interested in AJ Bell plc (LON:AJB) should probably be aware that the MD of Advised & Member of Management Board, Billy Mackay, recently divested UK£200k worth of shares in the company, at an average price of UK£5.01 each. On the bright side, that sale was only 2.9% of their holding, so we doubt it's very meaningful, on its own.

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AJ Bell Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, Member of the Management Board & Executive Director, Michael Summersgill, for UK£2.0m worth of shares, at about UK£4.45 per share. That means that even when the share price was below the current price of UK£4.92, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 43% of Michael Summersgill's stake.

Over the last year, we can see that insiders have bought 55.58k shares worth UK£233k. On the other hand they divested 966.30k shares, for UK£4.4m. All up, insiders sold more shares in AJ Bell 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. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for AJ Bell

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LSE:AJB Insider Trading Volume June 1st 2025

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insider Ownership

Many investors like to check how much of a company is owned by 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. It's great to see that AJ Bell insiders own 18% of the company, worth about UK£370m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

Portfolio Valuation calculation on simply wall st

So What Do The AJ Bell Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at AJ Bell, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. But since AJ Bell is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AJ Bell. Case in point: We've spotted 2 warning signs for AJ Bell you should be aware of, and 1 of these shouldn't be ignored.

But note: AJ Bell 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 of direct interests only, but not derivative transactions or indirect interests.