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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell 3i Group plc (LON:III), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
Check out our latest analysis for 3i Group
3i Group Insider Transactions Over The Last Year
In fact, the recent purchase by Simon Borrows was the biggest purchase of 3i Group shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of UK£11.47. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. 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. We note that Simon Borrows was also the biggest seller.
Over the last year, we can see that insiders have bought 5.15m shares worth UK£60m. But insiders sold 5.05m shares worth UK£59m. Overall, 3i Group insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
3i Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at 3i Group Have Bought Stock Recently
There was some insider buying at 3i Group over the last quarter. In that period CEO & Executive Director Simon Borrows spent UK£59m on shares. But CEO & Executive Director Simon Borrows sold UK£59m worth. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.