Anyone interested in Service Stream Limited (ASX:SSM) should probably be aware that the Non-Executive Chairman of the Board, Brett Gallagher, recently divested AU$160k worth of shares in the company, at an average price of AU$1.78 each. However, the silver lining is that the sale only reduced their total holding by 3.8%, so we're hesitant to read anything much into it, on its own.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

The Last 12 Months Of Insider Transactions At Service Stream

In the last twelve months, the biggest single sale by an insider was when the MD & Director, Leigh MacKender, sold AU$1.2m worth of shares at a price of AU$1.53 per share. That means that even when the share price was below the current price of AU$1.77, an insider wanted to cash in some shares. 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. We note that the biggest single sale was only 31% of Leigh MacKender's holding.

In the last twelve months insiders purchased 67.28k shares for AU$90k. But they sold 1.39m shares for AU$1.9m. In total, Service Stream insiders sold more than they bought over the last year. The average sell price was around AU$1.35. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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!

Check out our latest analysis for Service Stream

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Insider Ownership Of Service Stream

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Service Stream insiders own about AU$52m worth of shares. That equates to 4.7% 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?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. But since Service Stream is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Service Stream. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Service Stream.

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 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.