We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Ncondezi Energy Limited (LON:NCCL).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
View our latest analysis for Ncondezi Energy
Ncondezi Energy Insider Transactions Over The Last Year
Notably, that recent purchase by Scott Fletcher is the biggest insider purchase of Ncondezi Energy shares that we've seen in the last year. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.049). 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. 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. Scott Fletcher was the only individual insider to buy during the last year.
Scott Fletcher bought 3.82m shares over the last 12 months at an average price of UK£2.20. 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!
Ncondezi Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Ncondezi Energy
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Ncondezi Energy insiders own about UK£3.4m worth of shares. That equates to 20% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.