Yahoo Finance As Grainger plc's (LON:GRI) market cap increased UK£93m, insiders who bought last year may be reflecting on buying more
Grainger plc (LON:GRI) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 5.8% resulting in a UK£93m addition to the company’s market value. As a result, their original purchase of UK£51k worth of stock is now worth UK£53k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Grainger
The Last 12 Months Of Insider Transactions At Grainger
Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Robert Wilkinson for UK£51k worth of shares, at about UK£2.18 per share. So it's clear an insider wanted to buy, at around the current price, which is UK£2.29. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Grainger insider decided to buy shares at close to current prices. Robert Wilkinson was the only individual insider to buy shares in the last twelve months.
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!
Grainger is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. Our data suggests Grainger insiders own 0.1% of the company, worth about UK£2.1m. We consider this fairly low insider ownership.
So What Do The Grainger Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Grainger insiders are expecting a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Grainger (2 are concerning!) and we strongly recommend you look at these before investing.
But note: Grainger 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, 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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