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Investors who take an interest in AO World plc (LON:AO.) should definitely note that the Non-Executive Director, Christopher Hopkinson, recently paid UK£0.66 per share to buy UK£330k worth of the stock. Although the purchase only increased their holding by 2.1%, it is still a solid purchase in our view.
View our latest analysis for AO World
AO World Insider Transactions Over The Last Year
Notably, that recent purchase by Christopher Hopkinson is the biggest insider purchase of AO World shares that we've seen in the last year. That means that an insider was happy to buy shares at above the current price of UK£0.59. Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.
While AO World insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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).
Does AO World Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that AO World insiders own 23% of the company, worth about UK£78m. 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 AO World Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest AO World insiders are well aligned, and that they may think the share price is too low. 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. For example - AO World has 2 warning signs we think you should be aware of.