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Need To Know: Tabcorp Holdings Limited (ASX:TAH) Insiders Have Been Buying Shares

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Tabcorp Holdings Limited (ASX:TAH).

What Is Insider Selling?

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 equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.

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View our latest analysis for Tabcorp Holdings

The Last 12 Months Of Insider Transactions At Tabcorp Holdings

Over the last year, we can see that the biggest insider sale was by the Independent Chairman of the Board, Paula Dwyer, for AU$306k worth of shares, at about AU$2.53 per share. That means that even when the share price was below the current price of AU$3.21, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 49% of Paula Dwyer's holding. The only individual insider seller over the last year was Paula Dwyer. Notably Paula Dwyer was also the biggest buyer, having purchased AU$453k worth of shares.

In the last twelve months insiders purchased 120.63k shares for AU$453k. But they sold 120834 shares for AU$306k. In total, Tabcorp Holdings insiders bought more than they sold over the last year. They paid about AU$3.76 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

ASX:TAH Recent Insider Trading May 22nd 2020
ASX:TAH Recent Insider Trading May 22nd 2020

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.

Tabcorp Holdings Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Tabcorp Holdings shares over the last three months. In total, Independent Chairman of the Board Paula Dwyer sold AU$306k worth of shares in that time. On the other hand we note Independent Chairman of the Board Paula Dwyer bought AU$115k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.

Insider Ownership of Tabcorp Holdings

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From our data, it seems that Tabcorp Holdings insiders own 0.1% of the company, worth about AU$8.1m. Whilst better than nothing, we're not overly impressed by these holdings.

What Might The Insider Transactions At Tabcorp Holdings Tell Us?

Unfortunately, there has been more insider selling of Tabcorp Holdings stock, than buying, in the last three months. In contrast, they appear keener if you look at the last twelve months. Still, insiders don't own a great deal of the stock. So the company doesn't look great on this analysis. 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. To help with this, we've discovered 4 warning signs (2 shouldn't be ignored!) that you ought to be aware of before buying any shares in Tabcorp Holdings.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.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. 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. Thank you for reading.