We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Kingfisher plc (LON:KGF).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
The Last 12 Months Of Insider Transactions At Kingfisher
Chairman Andrew Cosslett made the biggest insider purchase in the last 12 months. That single transaction was for UK£160k worth of shares at a price of UK£2.26 each. That means that even when the share price was higher than UK£2.23 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 94050 shares for UK£219k. But insiders sold 29780 shares worth UK£71k. In the last twelve months there was more buying than selling by Kingfisher insiders. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Kingfisher is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Kingfisher Have Bought Stock Recently
Over the last quarter, Kingfisher insiders have spent a meaningful amount on shares. Interim Chief Financial Officer John Wartig spent UK£59k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own UK£2.0m worth of Kingfisher stock, about 0.04% of the company. I generally like to see higher levels of ownership.
So What Do The Kingfisher Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Kingfisher insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Kingfisher, you should check out this free report on analyst forecasts for the company.
Of course Kingfisher 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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.