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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Svenska Cellulosa Aktiebolaget SCA (publ) (STO:SCA B), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Svenska Cellulosa Aktiebolaget
Svenska Cellulosa Aktiebolaget Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Magnus Svensson bought kr1.7m worth of shares at a price of kr84.84 per share. That implies that an insider found the current price of kr91.52 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Svenska Cellulosa Aktiebolaget insiders decided to buy shares at close to current prices.
While Svenska Cellulosa Aktiebolaget insiders bought shares last year, they didn't sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
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. From looking at our data, insiders own kr32m worth of Svenska Cellulosa Aktiebolaget stock, about 0.05% of the company. I generally like to see higher levels of ownership.