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 The Artisanal Spirits Company plc (LON:ART), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Artisanal Spirits Insider Transactions Over The Last Year
The Independent Non-Executive Chairman of the Board Mark Hunter made the biggest insider purchase in the last 12 months. That single transaction was for UK£240k worth of shares at a price of UK£0.73 each. That implies that an insider found the current price of UK£0.74 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Artisanal Spirits share holders is that insiders were buying at near the current price.
Artisanal Spirits insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Artisanal Spirits Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Artisanal Spirits. Independent Non-Executive Director Gavin Hewitt purchased UK£15k worth of shares in that period. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership Of Artisanal Spirits
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. Artisanal Spirits insiders own about UK£15m worth of shares. That equates to 29% 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.
So What Do The Artisanal Spirits Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Artisanal Spirits insiders are doubting the company, and they do own shares. 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. While conducting our analysis, we found that Artisanal Spirits has 2 warning signs and it would be unwise to ignore these.
Of course Artisanal Spirits may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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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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