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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Southern Cross Media Group Limited (ASX:SXL), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. 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'.
Southern Cross Media Group Insider Transactions Over The Last Year
CEO, MD & Executive Director Grant Blackley made the biggest insider purchase in the last 12 months. That single transaction was for AU$489k worth of shares at a price of AU$1.39 each. So it's clear an insider wanted to buy, even at a higher price. It's very possible they regret the purchase, but it's more likely they are bullish about the company. That purchase may suggest an expectation of positive returns over the long term. Notably Grant Blackley was also the biggest seller, having sold AU$355k worth of shares.
Happily, we note that in the last year insiders paid AU$621k for 456.21k shares. On the other hand they divested 263.73k shares, for AU$355k. In the last twelve months there was more buying than selling by Southern Cross Media Group insiders. Their average price was about AU$1.36. This is nice to see since it implies that insiders might see value around current prices (around AU$1.13). 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Southern Cross Media Group
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own AU$5.0m worth of Southern Cross Media Group stock, about 0.6% of the company. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Southern Cross Media Group Insiders?
The fact that there have been no Southern Cross Media Group insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Southern Cross Media Group stock. Of course, the future is what matters most. So if you are interested in Southern Cross Media Group, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.