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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Inchcape plc's (LON:INCH) case, it's fantastic news for 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 Inchcape
Inchcape Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Group CEO & Director, Duncan Tait, for UK£323k worth of shares, at about UK£7.61 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£8.52. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 15% of Duncan Tait's holding. The only individual insider seller over the last year was Duncan Tait.
Happily, we note that in the last year insiders paid UK£368k for 57.46k shares. On the other hand they divested 42.45k shares, for UK£323k. Overall, Inchcape insiders were net buyers during the last year. 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 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 Inchcape
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. Inchcape insiders own about UK£64m worth of shares. That equates to 1.9% 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.
What Might The Insider Transactions At Inchcape Tell Us?
It doesn't really mean much that no insider has traded Inchcape shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders own shares in Inchcape and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Inchcape has 2 warning signs we think you should be aware of.