Many Innospec Inc. (NASDAQ:IOSP) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Innospec Insider Transactions Over The Last Year

The President, Patrick Williams, made the biggest insider sale in the last 12 months. That single transaction was for US$1.2m worth of shares at a price of US$126 each. That means that an insider was selling shares at slightly below the current price (US$129). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 5.6% of Patrick Williams's holding.

All up, insiders sold more shares in Innospec than they bought, over the last year. 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Innospec Have Sold Stock Recently

We have seen a bit of insider selling at Innospec, over the last three months. insider Hardy Griffin sold US$68k worth of shares in that time. But the good news is that there was purchasing too , worth US$25k. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.

Insider Ownership Of Innospec

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Innospec insiders own 1.1% of the company, worth about US$37m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Innospec Tell Us?

We note that there's been a little more insider selling than buying, recently. But the difference isn't enough to have us worried. Recent insider selling makes us a little nervous, in light of the broader picture of Innospec insider transactions. But it's good to see that insiders own shares in the company. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Innospec.

But note: Innospec may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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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.