The recent 3.3% drop in Dr. Martens plc's (LON:DOCS) stock could come as a blow to insiders who purchased UK£156k worth of stock at an average buy price of UK£3.72 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only UK£102k.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Dr. Martens
The Independent Non-Executive Director Robyn Perriss made the biggest insider purchase in the last 12 months. That single transaction was for UK£84k worth of shares at a price of UK£4.20 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£2.43). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Dr. Martens insiders bought shares during the last year, they didn't sell. Their average price was about UK£3.72. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Dr. Martens insiders own 7.4% of the company, worth about UK£180m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Dr. Martens Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Dr. Martens shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Dr. Martens insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dr. Martens. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Dr. Martens.
Of course Dr. Martens 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.