Read This Before Selling GB Group plc (LON:GBG) Shares
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in GB Group plc (LON:GBG).
What Is Insider Selling?
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, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for GB Group
GB Group Insider Transactions Over The Last Year
Group MD & Executive Director Nicolas Brown made the biggest insider sale in the last 12 months. That single transaction was for UK£575k worth of shares at a price of UK£4.18 each. That means that an insider was selling shares at slightly below the current price (UK£4.99). While their view may have changed since they sold, this isn’t a particularly bullish sign. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was only 13.6% of Nicolas Brown’s holding. The only individual insider seller over the last year was Nicolas Brown.
In the last twelve months insiders purchased 185.70k shares for UK£761k. But they sold 138.56k for UK£575k. In the last twelve months there was more buying than selling by GB Group insiders. Their average price was about UK£4.10. Although they bought at below the recent price of UK£4.99 per share, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
GB Group Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at GB Group. Overall, 6 insiders shelled out UK£761k for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of GB Group
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that GB Group insiders own 1.1% of the company, worth about UK£11m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About GB Group Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest GB Group insiders are well aligned, and that they may think the share price is too low. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for GB Group.
Of course GB Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
