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Totally plc (LON:TLY) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 43%, resulting in a UK£4.4m rise in the company's market capitalisation, translating to a gain of 38% on their initial investment. In other words, the original UK£109.2k purchase is now worth UK£150.5k.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Totally
The Last 12 Months Of Insider Transactions At Totally
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Simon Stilwell for UK£61k worth of shares, at about UK£0.062 per share. We do like to see buying, but this purchase was made at well below the current price of UK£0.075. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
While Totally insiders bought shares during the last year, they didn't sell. The average buy price was around UK£0.054. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Totally
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Totally insiders own 21% of the company, worth about UK£3.1m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Totally Tell Us?
It doesn't really mean much that no insider has traded Totally shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Totally insiders are doubting the company, and they do own shares. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 2 warning signs for Totally you should be aware of, and 1 of them doesn't sit too well with us.