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Who Has Been Selling Euromoney Institutional Investor PLC (LON:ERM) Shares?

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 shareholders might well want to know whether insiders have been buying or selling shares in Euromoney Institutional Investor PLC (LON:ERM).

What Is Insider Buying?

It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

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 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’.

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The Last 12 Months Of Insider Transactions At Euromoney Institutional Investor

Over the last year, we can see that the biggest insider sale was by Life President Patrick Sergeant for UK£728k worth of shares, at about UK£11.46 per share. That means that an insider was selling shares at slightly below the current price (UK£12.70). While their view may have changed since they sold, this isn’t a particularly bullish sign. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 38.6% of Patrick Sergeant’s stake.

All up, insiders sold more shares in Euromoney Institutional Investor than they bought, over the last year. The sellers received a price of around UK£12.08, on average. We don’t gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

LSE:ERM Insider Trading January 30th 19
LSE:ERM Insider Trading January 30th 19

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Euromoney Institutional Investor Boast High 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. We usually like to see fairly high levels of insider ownership. Based on our data, Euromoney Institutional Investor insiders have about 0.3% of the stock, worth approximately UK£3.6m. We prefer to see high levels of insider ownership.

So What Do The Euromoney Institutional Investor Insider Transactions Indicate?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. We don’t take much encouragement from the transactions by Euromoney Institutional Investor insiders. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

Of course Euromoney Institutional Investor may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.