We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Warpaint London PLC (LON:W7L), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Warpaint London Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Joint CEO & Executive Director Eoin MacLeod sold UK£2.9m worth of shares at a price of UK£2.34 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of UK£0.91. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we note insiders sold 2.50m shares worth UK£5.8m. Over the last year we saw more insider selling of Warpaint London shares, than buying. The average sell price was around UK£2.34. We are not joyful about insider selling. But we note that the selling, on average, was at well above the recently traded price of UK£0.91. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It’s great to see that Warpaint London insiders own 51% of the company, worth about UK£37m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Warpaint London Tell Us?
The fact that there have been no Warpaint London insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of Warpaint London, we can’t say the same about the selling of shares. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Warpaint London.
Of course Warpaint London may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.