Don't Ignore The Insider Selling In Frasers Group
Some Frasers Group Plc (LON:FRAS) shareholders may be a little concerned to see that insider Michael James Ashley recently sold a substantial UK£3.7m worth of stock at a price of UK£9.76 per share. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 0.1%.
The Last 12 Months Of Insider Transactions At Frasers Group
Notably, that recent sale by Michael James Ashley is the biggest insider sale of Frasers Group shares that we've seen in the last year. That means that an insider was selling shares at around the current price of UK£9.49. 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.
The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Frasers 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.
Does Frasers Group Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Frasers Group insiders own 77% of the company, worth about UK£3.1b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Frasers Group Insider Transactions Indicate?
An insider hasn't bought Frasers Group stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. But it is good to see that Frasers Group is growing earnings. 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. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Frasers Group and we suggest you have a look.
But note: Frasers Group 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.
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