Several Insiders Invested In Mothercare Flagging Positive News
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Mothercare plc (LON:MTC), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Mothercare
Mothercare Insider Transactions Over The Last Year
In fact, the recent purchase by Non-Executive Chairman Clive Whiley was not their only acquisition of Mothercare shares this year. Earlier in the year, they paid UK£0.07 per share in a UK£65k purchase. That means that an insider was happy to buy shares at above the current price of UK£0.046. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 2.48m shares worth UK£172k. On the other hand they divested 929.00k shares, for UK£65k. In total, Mothercare insiders bought more than they sold over the last year. 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!
Mothercare is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Mothercare Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Mothercare. Specifically, Non-Executive Chairman Clive Whiley bought UK£47k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership Of Mothercare
Many investors like to check how much of a company is owned by 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. From our data, it seems that Mothercare insiders own 15% of the company, worth about UK£3.9m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Mothercare Insiders?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Mothercare stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that Mothercare has 3 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.
But note: Mothercare 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 of direct interests only, but not derivative transactions or indirect interests.
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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.
