Some Service Stream Limited (ASX:SSM) shareholders may be a little concerned to see that the MD & Director, Leigh MacKender, recently sold a substantial AU$1.2m worth of stock at a price of AU$1.53 per share. That's a big disposal, and it decreased their holding size by 31%, which is notable but not too bad.

See our latest analysis for Service Stream

Service Stream Insider Transactions Over The Last Year

The Non-Executive Chairman of the Board, Brett Gallagher, made the biggest insider sale in the last 12 months. That single transaction was for AU$2.0m worth of shares at a price of AU$1.25 each. That means that an insider was selling shares at slightly below the current price (AU$1.59). 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. 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. It is worth noting that this sale was only 40% of Brett Gallagher's holding.

Over the last year, we can see that insiders have bought 77.28k shares worth AU$100k. But they sold 2.91m shares for AU$3.7m. Over the last year we saw more insider selling of Service Stream shares, than buying. 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!

I will like Service Stream better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Service Stream

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. Service Stream insiders own about AU$35m worth of shares. That equates to 3.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Service Stream Insiders?

Unfortunately, there has been more insider selling of Service Stream stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since Service Stream is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Service Stream that deserve your attention before buying any shares.

Of course Service Stream 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 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.