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 3i Group plc (LON:III), 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 do think it is perfectly logical to keep tabs on what insiders are doing.
3i Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Stephen Daintith for UK£98k worth of shares, at about UK£11.12 per share. We do like to see buying, but this purchase was made at well below the current price of UK£12.70. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While 3i Group insiders bought shares during the last year, they didn't sell. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
3i Group Insiders Bought Stock Recently
Over the last quarter, 3i Group insiders have spent a meaningful amount on shares. We can see that insider Stephen Daintith paid UK£98k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership Of 3i Group
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. 3i Group insiders own about UK£225m worth of shares (which is 1.8% 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 3i Group Tell Us?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about 3i Group. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for 3i Group (2 can't be ignored!) and we strongly recommend you look at these before investing.
But note: 3i Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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