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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in BillerudKorsnäs AB (publ) (STO:BILL).
Do Insider Transactions Matter?
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, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Check out our latest analysis for BillerudKorsnäs
BillerudKorsnäs Insider Transactions Over The Last Year
President & CEO Petra Einarsson made the biggest insider purchase in the last 12 months. That single transaction was for kr1.0m worth of shares at a price of kr102 each. That means that an insider was happy to buy shares at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
Happily, we note that in the last year insiders paid kr2.3m for 21.75k shares. But insiders sold 12.73k shares worth kr1.7m. Overall, BillerudKorsnäs insiders were net buyers last year. They paid about kr104 on average. Although they bought at below the recent price of kr116 per share, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like BillerudKorsnäs better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, BillerudKorsnäs insiders have about 0.2% of the stock, worth approximately kr45m. But they may have an indirect interest through a corporate structure that we haven’t picked up on. We prefer to see high levels of insider ownership.