Yahoo Finance Great news for Johnson Matthey Plc (LON:JMAT): Insiders acquired stock in large numbers last year
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Johnson Matthey Plc's (LON:JMAT) instance, it's good news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Johnson Matthey
The Last 12 Months Of Insider Transactions At Johnson Matthey
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Patrick Thomas bought UK£102k worth of shares at a price of UK£20.45 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£20.25). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Johnson Matthey insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Johnson Matthey Have Bought Stock Recently
It's good to see that Johnson Matthey insiders have made notable investments in the company's shares. We can see that Independent Non-Executive Director Jane Griffiths paid UK£51k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Insider Ownership
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. From looking at our data, insiders own UK£1.2m worth of Johnson Matthey stock, about 0.03% of the company. We consider this fairly low insider ownership.
So What Do The Johnson Matthey Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Johnson Matthey insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Johnson Matthey. Our analysis shows 3 warning signs for Johnson Matthey (1 is concerning!) and we strongly recommend you look at these before investing.
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.
