Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of GB Group plc (LON:GBG), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At GB Group
The Group MD & Executive Director Nicolas Brown made the biggest insider purchase in the last 12 months. That single transaction was for UK£98k worth of shares at a price of UK£7.89 each. That means that an insider was happy to buy shares at above the current price of UK£5.06. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months GB Group insiders were buying shares, but not selling. Their average price was about UK£6.56. This is nice to see since it implies that insiders might see value around current prices. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At GB Group Have Bought Stock Recently
Over the last quarter, GB Group insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought UK£91k worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership Of GB Group
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that GB Group insiders own 0.7% of the company, worth about UK£9.4m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At GB Group Tell Us?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that GB Group insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing GB Group. While conducting our analysis, we found that GB Group has 3 warning signs and it would be unwise to ignore these.
Of course GB Group 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, but not derivative transactions.
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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.
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