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We often see insiders buying up shares in companies that perform well over the long term. 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 we'll take a look at whether insiders have been buying or selling shares in Hollywood Bowl Group plc (LON:BOWL).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Hollywood Bowl Group
In the last twelve months, the biggest single sale by an insider was when the Chief Marketing & Technology Officer, Mathew Hart, sold UK£694k worth of shares at a price of UK£2.29 per share. So what is clear is that an insider saw fit to sell at around the current price of UK£2.21. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Over the last year, we can see that insiders have bought 20052 shares worth UK£45k. But they sold 321k for UK£735k. In total, Hollywood Bowl Group insiders sold more than they bought over the last year. 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!
I will like Hollywood Bowl Group better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Hollywood Bowl Group Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at Hollywood Bowl Group. In that time, insiders dumped UK£735k worth of shares. On the flip side, Independent Non-Executive Director Ivan Schofield spent UK£40k on purchasing shares. Generally this level of net selling might be considered a bit bearish.
Insider Ownership of Hollywood Bowl Group
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Hollywood Bowl Group insiders own 4.7% of the company, worth about UK£16m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Hollywood Bowl Group Insiders?
The insider sales have outweighed the insider buying, at Hollywood Bowl Group, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Hollywood Bowl Group is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Hollywood Bowl Group.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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 firstname.lastname@example.org. 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.