Insiders of XP Power Limited (LON:XPP) received good value on their investment after their UK£856k purchase jumped UK£86k in value
Last week, XP Power Limited (LON:XPP) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a UK£40m increase in the company's market worth. As a result, the stock they originally bought for UK£856k is now worth UK£943k.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for XP Power
XP Power Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Founder & Non-Executive Chairman James Peters for UK£757k worth of shares, at about UK£17.82 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£20.35. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid UK£856k for 46.32k shares. But they sold 42.48k shares for UK£757k. In the last twelve months there was more buying than selling by XP Power insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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).
Insider Ownership Of XP Power
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. XP Power insiders own about UK£22m worth of shares. That equates to 5.6% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About XP Power Insiders?
Insider buying and selling have balanced each other out in the last three months, so we can't deduct anything useful from these recent trades. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in XP Power and their transactions don't cause us concern. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 3 warning signs for XP Power (of which 2 are a bit unpleasant!) you should know about.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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