Derwent London Plc (LON:DLN) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 4.5% resulting in a UK£126m addition to the company’s market value. In other words, the original UK£124k purchase is now worth UK£169k.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Derwent London
The Executive Director Nigel George made the biggest insider purchase in the last 12 months. That single transaction was for UK£50k worth of shares at a price of UK£19.26 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£26.20. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
While Derwent London insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Derwent London is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Derwent London insiders own about UK£68m worth of shares. That equates to 2.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Derwent London Tell Us?
It doesn't really mean much that no insider has traded Derwent London shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Derwent London and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example - Derwent London has 2 warning signs we think you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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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.
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