It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in The Rank Group Plc (LON:RNK).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
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 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'.
Rank Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Director John O'Reilly bought UK£199k worth of shares at a price of UK£2.16 per share. We do like to see buying, but this purchase was made at well below the current price of UK£2.76. 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 Rank Group insiders bought shares last year, they didn't sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Rank Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Rank Group Insiders Bought Stock Recently
It's good to see that Rank Group insiders have made notable investments in the company's shares. In total, insiders bought UK£303k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Rank 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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£3.1m worth of Rank Group stock, about 0.3% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.
So What Does This Data Suggest About Rank Group Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Rank Group insiders are expecting a bright future. 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 Rank Group may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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.
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