When deciding whether buying stocks in a company is a good investment or not, investors often monitor the insider selling activity of the company’s top executives, such as Northern Star’s executive chairman, Bill Beament, to ascertain if a stock’s value is headed north or going south. Beament has made three major share sell-downs in over 15 months. Investors and shareholders should be concerned. Why is Beament sharing his shares?
Insider selling makes investors uneasy. Perception is that they possess insights of future falls in share markets and they are cashing in ahead of the market. It is difficult to think otherwise – as shareholders will hold or increase their holdings in a growth company.
Beament’s biggest corporate insider sale gives rise to uncertainty
Bill Beament is reported to have sold approximately $22 million shares in Northern Star Resources. According to an ASX Change of Director’s Notice last March, Beament retains 6,283,588 Northern Star shares, which is estimated at around $56 million, and 3,000,000 Performance Rights after the sale of 2,460,000 shares as a result of a family court settlement.
The significant insider share sales of Beament give rise to doubt and uncertainty among investors and shareholders. Investors will speculate that Beament is selling his shares because he lacks confidence in his management or that he has inside knowledge about the subpar performance of the company, resulting in a plunge in the share price.
The last thing investors want to find out is that Bill Beament, the executive chairman of Northern Star, will be selling more of his stocks. Investors will begin to question Beament’s motives for selling down his shares.
Is Bill Beament abandoning his ship by selling his shares? Will there be further share sell-downs? Beament should be increasing his holdings rather than cashing out because his share sales give a negative vibe to investors and shareholders.