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Have HMS Networks AB (publ) (STO:HMS) Insiders Been Selling Their Stock? – Simply Wall St

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We note that the HMS Networks AB (publ) (STO:HMS) Employee Representative Director, Mikael Mårtensson, recently sold kr148k worth of stock for kr198 per share. However we note that the sale only shrunk their holding by 2.8%.

See our latest analysis for HMS Networks

HMS Networks Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Chief Marketing Officer, Anders Hansson, for kr1.6m worth of shares, at about kr176 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of kr196. 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. We note that the biggest single sale was only 27% of Anders Hansson’s holding.

In the last twelve months insiders purchased 843.12 shares for kr116k. On the other hand they divested 10.35k shares, for kr1.8m. In total, HMS Networks insiders sold more than they bought over the last year. The average sell price was around kr175. It’s not particularly great to see insiders were selling shares at below recent prices. But we wouldn’t put too much weight on the insider selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
OM:HMS Insider Trading Volume August 1st 2020

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of HMS Networks

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. HMS Networks insiders own 15% of the company, currently worth about kr1.3b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At HMS Networks Tell Us?

The stark truth for HMS Networks is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn’t bring confidence, either. But it is good to see that HMS Networks is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. For example – HMS Networks has 1 warning sign we think you should be aware of.

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.

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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.
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