Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in Restore plc (LON:RST).
What Is Insider Selling?
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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Restore
CEO & Executive Director Charles Anthony Skinner made the biggest insider purchase in the last 12 months. That single transaction was for UK£184k worth of shares at a price of UK£3.38 each. That means that an insider was happy to buy shares at above the current price. 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 generally consider it a positive if insiders have been buying on market, even above the current price. Notably Charles Anthony Skinner was also the biggest seller, having sold UK£67k worth of shares.
In the last twelve months insiders purchased 118.88k shares for UK£445k. On the other hand they divested 12.05k shares, for UK£67k. Overall, Restore insiders were net buyers last year. The average buy price was around UK£3.75. I'd consider this a positive as it suggests insiders see value at around the current price, which is UK£3.24. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Restore Have Bought Stock Recently
It's good to see that Restore insiders have made notable investments in the company's shares. In total, insiders bought UK£279k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
Insider Ownership of Restore
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. Our data indicates that Restore insiders own about UK£6.5m worth of shares (which is 1.6% of the company). We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Restore Insiders?
It's certainly positive to see the recent insider purchases. 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 Restore insiders are expecting a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Restore 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.