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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of discoverIE Group plc (LON:DSCV), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for discoverIE Group
discoverIE Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Senior Independent Director Bruce Thompson for UK£87k worth of shares, at about UK£7.94 per share. That means that even when the share price was higher than UK£6.90 (the recent price), an insider wanted to purchase shares. 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 if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
discoverIE Group insiders may have bought shares in the last year, but they didn't sell any. They paid about UK£6.90 on average. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. discoverIE Group insiders own about UK£12m worth of shares. That equates to 1.8% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The discoverIE Group Insider Transactions Indicate?
The fact that there have been no discoverIE Group insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in discoverIE Group and we see no evidence to suggest they are worried about the future. 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. You'd be interested to know, that we found 1 warning sign for discoverIE Group and we suggest you have a look.