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Insiders were net buyers of Drax Group plc's (LON:DRX ) stock during the past year. That is, insiders bought more stock than they sold.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Drax Group
The Last 12 Months Of Insider Transactions At Drax Group
The Independent Non-Executive Director Robert Shuter made the biggest insider purchase in the last 12 months. That single transaction was for UK£517k worth of shares at a price of UK£6.46 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£6.30). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. The only individual insider to buy over the last year was Robert Shuter.
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!
Drax Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Drax Group Insiders Are Selling The Stock
The last three months saw significant insider selling at Drax Group. Specifically, Chief Commercial Officer Paul Sheffield ditched UK£50k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Drax Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Drax Group insiders own 0.6% of the company, worth about UK£14m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Drax Group Insiders?
Our data shows a little more insider selling, but no insider buying, in the last three months. However, the sales are not big enough to concern us at all. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Drax Group insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Drax Group (1 is significant!) and we strongly recommend you look at these before investing.