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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 Polar Capital Holdings Plc (LON:POLR), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Polar Capital Holdings
The Last 12 Months Of Insider Transactions At Polar Capital Holdings
Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Gavin Rochussen for UK£101k worth of shares, at about UK£5.50 per share. That means that an insider was happy to buy shares at above the current price of UK£4.92. 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. We always take careful note of the price insiders pay when purchasing 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 insiders purchased 31.36k shares for UK£172k. But insiders sold 6.79k shares worth UK£30k. In total, Polar Capital Holdings insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership Of Polar Capital Holdings
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. Polar Capital Holdings insiders own about UK£25m worth of shares. That equates to 5.3% 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 Polar Capital Holdings Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Polar Capital Holdings and their transactions don't cause us concern. 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. You'd be interested to know, that we found 1 warning sign for Polar Capital Holdings and we suggest you have a look.