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 Ten Entertainment Group plc (LON:TEG), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 equally, we would consider it foolish to ignore insider transactions altogether. 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’.
Ten Entertainment Group Insider Transactions Over The Last Year
Non-Executive Director Christopher Mills made the biggest insider sale in the last 12 months. That single transaction was for UK£21m worth of shares at a price of UK£2.40 each. So it’s clear an insider wanted to take some cash off the table, even slightly below the current price of UK£2.41. While sellers have a variety of reasons for selling, this isn’t particularly great to see. As a general rule we consider it to be discouraging when insiders are selling below the current price. We note that the biggest single sale was 78.5% of Christopher Mills’s holding.
Over the last year we saw more insider selling of Ten Entertainment Group shares, than buying. They sold for an average price of about UK£2.40. We don’t gain confidence from insider selling below the recent share price. But we wouldn’t put too much weight on the insider selling. You can see the insider transactions (by individuals) over the last year depicted in the chart 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 Ten Entertainment Group Have Bought Stock Recently
We saw some Ten Entertainment Group insider buying shares in the last three months. Senior Independent Non-Executive Director David Wild purchased UK£24k worth of shares in that period. It’s great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of Ten Entertainment Group
For a common shareholder, it is worth checking how many shares are held by company 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. Insiders own 7.7% of Ten Entertainment Group shares, worth about UK£12m. 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 Do The Ten Entertainment Group Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But overall the difference isn’t worth writing home about. We don’t take much encouragement from the transactions by Ten Entertainment Group insiders. The modest level of insider ownership is, at least, some comfort. 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.
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.
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 email@example.com.