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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Harworth Group plc (LON:HWG).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
See our latest analysis for Harworth Group
The Last 12 Months Of Insider Transactions At Harworth Group
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Alastair Lyons bought UK£99k worth of shares at a price of UK£1.05 per share. We do like to see buying, but this purchase was made at well below the current price of UK£1.45. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months Harworth Group insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Harworth Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Harworth Group Have Bought Stock Recently
Over the last quarter, Harworth Group insiders have spent a meaningful amount on shares. Overall, two insiders shelled out UK£60k for shares in the company -- and none sold. This makes one think the business has some good points.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Harworth Group insiders own 0.2% of the company, worth about UK£853k. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Harworth Group Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Harworth Group insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with Harworth Group (including 1 which shouldn't be ignored).