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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Serica Energy plc's (LON:SQZ) case, it's fantastic news for shareholders.
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.
Check out our latest analysis for Serica Energy
Serica Energy Insider Transactions Over The Last Year
The CEO & Director Christopher Cox made the biggest insider purchase in the last 12 months. That single transaction was for UK£170k worth of shares at a price of UK£1.36 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£1.23). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Serica Energy insiders bought shares during the last year, they didn't sell. Their average price was about UK£1.17. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Serica Energy is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At Serica Energy Have Bought Stock Recently
It's good to see that Serica Energy insiders have made notable investments in the company's shares. In total, insiders bought UK£270k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Does Serica Energy Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Based on our data, Serica Energy insiders have about 0.2% of the stock, worth approximately UK£1.0m. But they may have an indirect interest through a corporate structure that we haven't picked up on. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Serica Energy Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Serica Energy stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Serica Energy has 1 warning sign we think you should be aware of.