If top-level corporate insiders are selling a large amount of company stock, it can pay to approach the stock with caution. Substantial insider sales can indicate that the outlook for the company is deteriorating or that the stock is overvalued.
In this report, we are going to highlight some insider selling at British Land Company PLC (BLND:LN). British Land is a real estate company that owns and manages a portfolio of retail and office properties across the UK. It is listed on the London Stock Exchange and currently has a market capitalization of £4.5 billion.
British Land: director dealing
Our records show that in recent weeks, British Land’s ex-CEO, Chris Grigg, has made two large sales. On 23 November, the insider sold 220,000 shares at a price of £4.74 per share. Then, on 26 November, he sold another 180,000 shares at a price of £4.75 per share. Overall, he sold roughly £1.9 million worth of stock.
Large insider sale
This insider selling is significant for several reasons. Firstly, the sales are large for Grigg, who was CEO at British Land for 11 years. By selling a total of 400,000 shares, he has reduced the size of his holding by 28%. This suggests that he sees limited share price upside in the near term. Secondly, our Insider Model sees this director dealing activity as bearish.
British Land posted a disappointing set of half-year results in November. For the period, underlying EPS was down 34.8% reflecting an increase in provisions for rent receivables. Meanwhile, the value of the company’s property portfolio was down 7.3% with its retail portfolio down 14.9%.
Looking ahead, the company advised that the business environment is likely to be challenging. In offices, it expects leasing volumes to be lower as a result of Covid-19 and Brexit-related uncertainty. In retail, it believes occupiers will remain under pressure and will continue to focus only on the best quality space that supports an online offer.
In light of these results, we see the insider selling here as a bearish signal. Given the size of the sale, we think caution is warranted towards the stock right now.