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Investors who take an interest in Synthomer plc (LON:SYNT) should definitely note that the CEO & Executive Director, Michael Willome, recently paid UK£1.18 per share to buy UK£83k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 62%, potentially signalling some real optimism.
See our latest analysis for Synthomer
The Last 12 Months Of Insider Transactions At Synthomer
In fact, the recent purchase by CEO & Executive Director Michael Willome was not their only acquisition of Synthomer shares this year. Earlier in the year, they paid UK£2.38 per share in a UK£112k purchase. That means that an insider was happy to buy shares at above the current price of UK£1.18. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Synthomer insiders were buying shares, but not selling. They paid about UK£1.51 on average. This is nice to see since it implies that insiders might see value around current prices. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Synthomer 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.
Does Synthomer Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own UK£1.1m worth of Synthomer stock, about 0.6% of the company. I generally like to see higher levels of ownership.
So What Do The Synthomer Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Synthomer stock. While it's good to be aware of 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. For instance, we've identified 2 warning signs for Synthomer (1 shouldn't be ignored) you should be aware of.