How Much Are Carclo plc (LON:CAR) Insiders Spending On Buying Shares?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Carclo plc (LON:CAR).
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
Check out our latest analysis for Carclo
Carclo Insider Transactions Over The Last Year
The Executive Chairman of the Board Nick Sanders made the biggest insider purchase in the last 12 months. That single transaction was for UK£50k worth of shares at a price of UK£0.17 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£0.57. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
You can see a visual depiction of insider transactions (by companies and 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!
Carclo is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Based on our data, Carclo insiders have about 1.1% of the stock, worth approximately UK£453k. We consider this fairly low insider ownership.
What Might The Insider Transactions At Carclo Tell Us?
The fact that there have been no Carclo insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Carclo stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Carclo. Every company has risks, and we've spotted 5 warning signs for Carclo (of which 2 are a bit concerning!) you should know about.
Of course Carclo may not be the best stock to buy. So you may wish to see this free collection of high quality 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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