Positive Signs As Multiple Insiders Buy Shearwater Group Stock
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Shearwater Group plc's (LON:SWG) instance, it's good news for shareholders.
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 Shearwater Group
Shearwater Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Group CEO & Executive Director Philip Higgins bought UK£103k worth of shares at a price of UK£0.64 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.51). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Notably Philip Higgins was also the biggest seller.
Happily, we note that in the last year insiders paid UK£348k for 460.44k shares. But they sold 101.75k shares for UK£79k. Overall, Shearwater Group insiders were net buyers during the last year. They paid about UK£0.76 on average. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and 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!
Shearwater Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Shearwater Group Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Shearwater Group, over the last three months. Group CEO & Executive Director Philip Higgins spent UK£142k on stock. But we did see Group CEO & Executive Director Philip Higgins sell shares worth UK£39k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership Of Shearwater 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. It's great to see that Shearwater Group insiders own 41% of the company, worth about UK£4.9m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Shearwater Group Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Shearwater Group insiders are well aligned, and quite possibly think the share price is too low. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Shearwater Group has 3 warning signs and it would be unwise to ignore them.
But note: Shearwater 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
