We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell BGC Partners, Inc. (NASDAQ:BGCP), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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The Last 12 Months Of Insider Transactions At BGC Partners
Over the last year, we can see that the biggest insider purchase was by Sean Galvin for US$222k worth of shares, at about US$11.08 per share. That means that even when the share price was higher, an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 30.00k shares worth US$333k. In the last twelve months there was more buying than selling by BGC Partners insiders. They paid about US$11.08 on average. This is nice to see since it implies that insiders might see value around current prices (around US$6.15). You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
BGC Partners is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at BGC Partners Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at BGC Partners. Specifically, Sean Galvin bought US$222k worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. BGC Partners insiders own about US$61m worth of shares. That equates to 2.5% 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 BGC Partners Tell Us?
It is good to see recent insider purchase. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of BGC Partners we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in BGC Partners, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.