NatWest Group Insiders Sold UK£2.8m Of Shares Suggesting Hesitancy

Simply Wall St · 09/15/2023 06:23

In the last year, many NatWest Group plc (LON:NWG) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for NatWest Group

The Last 12 Months Of Insider Transactions At NatWest Group

In the last twelve months, the biggest single sale by an insider was when the Group CFO & Executive Director, Katie Murray, sold UK£1.7m worth of shares at a price of UK£2.74 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of UK£2.37. So it may not tell us anything about how insiders feel about the current share price.

In the last twelve months insiders purchased 436.90k shares for UK£1.1m. But they sold 1.06m shares for UK£2.8m. All up, insiders sold more shares in NatWest 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!

insider-trading-volume
LSE:NWG Insider Trading Volume September 15th 2023

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Insiders At NatWest Group Have Bought Stock Recently

We saw some NatWest Group insider buying shares in the last three months. Insiders purchased UK£24k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that NatWest Group insiders own 0.09% of the company, worth about UK£18m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The NatWest Group Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. Our analysis of NatWest Group insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that NatWest Group is showing 2 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

Of course NatWest Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.