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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 before you buy or sell Brewin Dolphin Holdings PLC (LON:BRW), 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, rules govern insider transactions, and certain disclosures are required.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
The Last 12 Months Of Insider Transactions At Brewin Dolphin Holdings
Over the last year, we can see that the biggest insider purchase was by CEO & Director Robin Beer for UK£101k worth of shares, at about UK£2.66 per share. We do like to see buying, but this purchase was made at well below the current price of UK£3.44. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Brewin Dolphin Holdings insiders may have bought shares in the last year, but they didn't sell any. 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!
Brewin Dolphin Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Brewin Dolphin Holdings Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Brewin Dolphin Holdings. insider Caroline Taylor purchased UK£23k 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.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Brewin Dolphin Holdings insiders have about 0.1% of the stock, worth approximately UK£1.5m. We prefer to see high levels of insider ownership.
So What Do The Brewin Dolphin Holdings Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. 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 Brewin Dolphin Holdings stock. 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.
But note: Brewin Dolphin Holdings 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.
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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