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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 Glencore plc (LON:GLEN), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Glencore
Glencore Insider Transactions Over The Last Year
The Independent Non-Executive Director David Wormsley made the biggest insider purchase in the last 12 months. That single transaction was for UK£96k worth of shares at a price of UK£4.81 each. That means that even when the share price was higher than UK£3.67 (the recent price), an insider wanted to purchase shares. 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. 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.
In the last twelve months Glencore insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Glencore is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insider Ownership Of Glencore
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Glencore insiders own about UK£4.5b worth of shares (which is 10% 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.
What Might The Insider Transactions At Glencore Tell Us?
It doesn't really mean much that no insider has traded Glencore shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Glencore insiders think the business has merit. 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. Our analysis shows 2 warning signs for Glencore (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.