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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Climeon AB (publ) (STO:CLIME B).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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 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.
See our latest analysis for Climeon
The Last 12 Months Of Insider Transactions At Climeon
Over the last year, we can see that the biggest insider sale was by the Founder, Joachim Karthäuser, for kr15m worth of shares, at about kr59.00 per share. That means that an insider was selling shares at slightly below the current price (kr69.90). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 100% of Joachim Karthäuser's holding.
In the last twelve months insiders purchased 454135 shares for kr15m. On the other hand they divested 994896 shares, for kr53m. In total, Climeon insiders sold more than they bought over the last year. The average sell price was around kr53.36. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Have Climeon Insiders Traded Recently?
Head of Production & Sourcing Carina Osmund bought just kr3.5k worth of shares in that time. That's not much at all. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. Climeon insiders own about kr1.4b worth of shares (which is 39% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.