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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Nanoco Group plc (LON:NANO), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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’.
The Last 12 Months Of Insider Transactions At Nanoco Group
CEO & Executive Director Michael Edelman made the biggest insider sale in the last 12 months. That single transaction was for UK£784k worth of shares at a price of UK£0.48 each. That means that an insider was selling shares at slightly below the current price (UK£0.51). While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. It is worth noting that this sale was only 37.2% of Michael Edelman’s holding. Michael Edelman was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid UK£86k for 249.87k shares. On the other hand they divested 1.85m shares, for UK£784k. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Nanoco Group Have Bought Stock Recently
Over the last three months, we’ve seen a bit of insider buying at Nanoco Group. Non-Executive Director Alison Fielding shelled out UK£20k for shares in that time. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. 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 5.3% of Nanoco Group shares, worth about UK£7.7m, according to our data. We do generally prefer see higher levels of insider ownership.
So What Do The Nanoco Group Insider Transactions Indicate?
We note a that there has been a tad more insider buying than selling, recently. But overall the difference isn’t worth writing home about. We don’t take much encouragement from the transactions by Nanoco Group insiders. And usually insiders own more stock in the company, according to our data. Of course, the future is what matters most. So if you are interested in Nanoco Group, you should check out this free report on analyst forecasts for the company.
But note: Nanoco Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 firstname.lastname@example.org.