Yahoo Finance DS Smith Plc's stock is down 7.2%, but insiders still have about UK£20k in profit after buying earlier this year
DS Smith Plc (LON:SMDS) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 7.2% decline in the stock price. After accounting for the recent loss, the UK£297k worth of shares they purchased is now worth UK£317k, suggesting a good return on their investment.
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.
Check out our latest analysis for DS Smith
DS Smith Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Group Finance Director & Executive Director, Adrian R. Marsh, for UK£148k worth of shares, at about UK£3.59 per share. So we know that an insider sold shares at around the present share price of UK£3.42. 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 only individual insider seller over the last year was Adrian R. Marsh. Notably Adrian R. Marsh was also the biggest buyer, having purchased UK£297k worth of shares.
Happily, we note that in the last year insiders paid UK£297k for 92.69k shares. On the other hand they divested 51.12k shares, for UK£177k. In the last twelve months there was more buying than selling by DS Smith insiders. They paid about UK£3.20 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Are DS Smith Insiders Buying Or Selling?
In the last three months, insiders sold UK£148k. However that only slightly eclipses the UK£147k worth of purchases. Looking at the net result, we don't think this recent trading sheds much light on how insiders, as a group, are feeling about the company's prospects.
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. It appears that DS Smith insiders own 0.2% of the company, worth about UK£9.7m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At DS Smith Tell Us?
Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if DS Smith insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 3 warning signs for DS Smith (of which 1 can't be ignored!) you should know about.
Of course DS Smith may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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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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