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Bullish insiders bet US$1.6m on Standard Chartered PLC (LON:STAN)

Simply Wall St
·3-min read

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Standard Chartered PLC (LON:STAN), that sends out a positive message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Standard Chartered

Standard Chartered Insider Transactions Over The Last Year

The insider, Sunil Kaushal, made the biggest insider sale in the last 12 months. That single transaction was for UK£819k worth of shares at a price of UK£5.46 each. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£6.14. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 33% of Sunil Kaushal's holding.

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In the last twelve months insiders purchased 338.13k shares for UK£1.6m. But insiders sold 178.35k shares worth UK£955k. In total, Standard Chartered insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

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 Of Standard Chartered

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 Standard Chartered insiders own 0.2% of the company, worth about UK£37m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Standard Chartered Insiders?

It doesn't really mean much that no insider has traded Standard Chartered shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Standard Chartered and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for Standard Chartered you should know about.

But note: Standard Chartered 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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