Insiders who sold SBM Offshore N.V.’s (AMS:SBMO) earlier year may find some solace in the 4.0% drop – Simply Wall St

Despite the fact that SBM Offshore N.V.'s (AMS:SBMO) value has dropped 4.0% in the last week insiders who sold US$1.1m worth of stock in the past 12 months have had less success. Insiders might have been better off holding onto their shares, given that the average selling price of US$13.36 is still below the current share price.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for SBM Offshore

In the last twelve months, the biggest single sale by an insider was when the Chairman of Management Board & CEO, Bruno Y. Chabas, sold 684k worth of shares at a price of 13.36 per share. That means that even when the share price was below the current price of 13.74, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 3.9% of Bruno Y. Chabas's holding.

In the last year SBM Offshore insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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).

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 SBM Offshore insiders own 1.4% of the company, worth about 35m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

It doesn't really mean much that no insider has traded SBM Offshore shares in the last quarter. Still, the insider transactions at SBM Offshore in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for SBM Offshore (of which 1 shouldn't be ignored!) you should know about.

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

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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Insiders who sold SBM Offshore N.V.'s (AMS:SBMO) earlier year may find some solace in the 4.0% drop - Simply Wall St