When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in London City Equities Limited's (ASX:LCE) instance, it's good 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 do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for London City Equities
The Last 12 Months Of Insider Transactions At London City Equities
Over the last year, we can see that the biggest insider purchase was by Chairman & COO Peter E. Murray for AU$306k worth of shares, at about AU$0.56 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.50). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
London City Equities insiders may have bought shares in the last year, but they didn't sell any. 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!
London City Equities is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Have London City Equities Insiders Traded Recently?
There was only a small bit of insider buying, worth AU$1.4k, in the last three months. Overall, we don't think these recent trades are particularly informative, one way or the other.
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. London City Equities insiders own about AU$7.8m worth of shares (which is 50% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The London City Equities Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, London City Equities insiders feel good about the company's future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Every company has risks, and we've spotted 5 warning signs for London City Equities (of which 4 shouldn't be ignored!) you should know about.