Some Steadfast Group Limited (ASX:SDF) shareholders may be a little concerned to see that the Co-Founder, Robert Kelly, recently sold a substantial AU$2.0m worth of stock at a price of AU$5.65 per share. That's a big disposal, and it decreased their holding size by 10%, which is notable but not too bad.

View our latest analysis for Steadfast Group

Steadfast Group Insider Transactions Over The Last Year

Notably, that recent sale by Co-Founder Robert Kelly was not the only time they sold Steadfast Group shares this year. Earlier in the year, they fetched AU$5.60 per share in a -AU$2.2m sale. That means that even when the share price was below the current price of AU$5.81, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 12% of Robert Kelly's stake.

All up, insiders sold more shares in Steadfast Group than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership Of Steadfast Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Steadfast Group insiders own 4.9% of the company, currently worth about AU$314m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Steadfast Group Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Steadfast Group, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Steadfast Group is profitable and growing, we're not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Steadfast Group and understanding them 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.

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.