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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Amigo Holdings PLC (LON:AMGO), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
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 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'.
Amigo Holdings Insider Transactions Over The Last Year
The insider Glen Crawford made the biggest insider purchase in the last 12 months. That single transaction was for UK£1.2m worth of shares at a price of UK£0.38 each. That means that an insider was happy to buy shares at above the current price of UK£0.087. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 3.77m shares for UK£1.3m. On the other hand they divested 1.42m shares, for UK£129k. In total, Amigo Holdings insiders bought more than they sold over the last year. Their average price was about UK£0.33. These transactions suggest that insiders have considered the current price attractive. 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Amigo Holdings Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Amigo Holdings. In total, insiders bought UK£57k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Amigo Holdings insiders have about 3.6% of the stock, worth approximately UK£1.5m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Amigo Holdings Tell Us?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Amigo Holdings insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Amigo Holdings. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Amigo Holdings.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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. 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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