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Wall Street JournalDon't Ignore The Insider Selling In Compass Group
We wouldn't blame Compass Group PLC (LON:CPG) shareholders if they were a little worried about the fact that Dominic Blakemore, the Group CEO & Director recently netted about UK£2.5m selling shares at an average price of UK£23.41. That sale reduced their total holding by 14% which is hardly insignificant, but far from the worst we've seen.
Compass Group Insider Transactions Over The Last Year
In fact, the recent sale by Dominic Blakemore was the biggest sale of Compass Group shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of UK£23.70. 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. 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. It is worth noting that this sale was only 14% of Dominic Blakemore's holding.
All up, insiders sold more shares in Compass Group than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Compass Group
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.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Compass Group insiders own 0.06% of the company, worth about UK£25m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Compass Group Tell Us?
The insider sales have outweighed the insider buying, at Compass Group, 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 Compass Group is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for Compass Group you should know about.
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 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.