Swedish Orphan Biovitrum Head of Strategic Transformation Operations Mahmood Ladha Sells 56% Of Holding
We wouldn't blame Swedish Orphan Biovitrum AB (publ) (STO:SOBI) shareholders if they were a little worried about the fact that Mahmood Ladha, the Head of Strategic Transformation Operations recently netted about kr28m selling shares at an average price of kr457. That diminished their holding by a very significant 56%, which arguably implies a strong desire to reallocate capital.
Swedish Orphan Biovitrum Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Head of North America, Duane Barnes, sold kr32m worth of shares at a price of kr312 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of kr458. 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. This single sale was 76% of Duane Barnes's stake.
In the last twelve months insiders purchased 2.49k shares for kr1.0m. But they sold 1.02m shares for kr358m. In total, Swedish Orphan Biovitrum insiders sold more than they bought over the last year. 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!
View our latest analysis for Swedish Orphan Biovitrum
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Insider Ownership Of Swedish Orphan Biovitrum
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. 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 Swedish Orphan Biovitrum insiders own 0.3% of the company, worth about kr521m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Swedish Orphan Biovitrum Insider Transactions Indicate?
Insiders sold Swedish Orphan Biovitrum shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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. In terms of investment risks, we've identified 3 warning signs with Swedish Orphan Biovitrum and understanding these should be part of your investment process.
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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 of direct interests only, but not derivative transactions or indirect interests.
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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.