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 discoverIE Group plc (LON:DSCV), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a 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’.
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
discoverIE Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Group Chief Executive & Director Nicholas Jefferies for UK£1.7m worth of shares, at about UK£4.22 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£3.90. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we can see that insiders have bought 13.36k shares worth UK£50k. But insiders sold 593.04k shares worth UK£2.5m. Over the last year we saw more insider selling of discoverIE Group shares, than buying. The sellers received a price of around UK£4.22, on average. It’s not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
discoverIE 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.
Insiders at discoverIE Group Have Bought Stock Recently
We saw some discoverIE Group insider buying shares in the last three months. Non-Executive Chairman Malcolm Diamond shelled out UK£20k for shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does discoverIE Group Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.8% of discoverIE Group shares, worth about UK£5.1m, according to our data. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
What Might The Insider Transactions At discoverIE Group Tell Us?
Our data shows a little more insider buying than selling in the last three months. But overall the difference isn’t worth writing home about. The insider transactions at discoverIE Group are not inspiring us to buy. 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 discoverIE Group, you should check out this free report on analyst forecasts for the company.
Of course discoverIE Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.