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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. 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 before you buy or sell Future PLC (LON:FUTR), you may well want to know whether insiders have been buying or selling.
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, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
The Last 12 Months Of Insider Transactions At Future
In the last twelve months, the biggest single sale by an insider was when CEO & Executive Director Zillah Byng-Thorne sold UK£1.3m worth of shares at a price of UK£5.15 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of UK£5.64. While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was 54% of Zillah Byng-Thorne’s stake. Notably Zillah Byng-Thorne was also the biggest buyer, having purchased UK£151k worth of shares.
In total, Future insiders sold more than they bought over the last year. The average sell price was around UK£5.03. It’s not too encouraging to see that insiders have sold at below the current price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Future Have Sold Stock Recently
Over the last three months, we’ve seen notably more insider selling, than insider buying, at Future. In total, insiders sold UK£2.0m worth of shares in that time. Meanwhile CEO & Executive Director Zillah Byng-Thorne bought UK£151k worth, as we said above. Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the shares are not cheap.
Insider Ownership of Future
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data suggests Future insiders own 0.5% of the company, worth about UK£2.5m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Future Tell Us?
Unfortunately, there has been more insider selling of Future stock, than buying, in the last three months. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, Future makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we’re a little wary. As the saying goes, only fools rush in. 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.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.