Yahoo Finance Quite a few insiders invested in Smart Metering Systems plc (LON:SMS) last year which is positive news for shareholders
Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Smart Metering Systems plc (LON:SMS), that sends out a positive message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Smart Metering Systems
The Last 12 Months Of Insider Transactions At Smart Metering Systems
The CEO & Director Timothy Mortlock made the biggest insider purchase in the last 12 months. That single transaction was for UK£100k worth of shares at a price of UK£7.29 each. We do like to see buying, but this purchase was made at well below the current price of UK£8.45. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months insiders purchased 21.99k shares for UK£165k. On the other hand they divested 2.11k shares, for UK£15k. In the last twelve months there was more buying than selling by Smart Metering Systems insiders. 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!
Smart Metering Systems is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Smart Metering Systems Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Smart Metering Systems, over the last three months. In fact, four insiders bought UK£165k worth of shares. But we did see Independent Non-Executive Chairman Miriam Greenwood sell shares worth UK£15k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Smart Metering Systems Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Smart Metering Systems insiders own about UK£49m worth of shares. That equates to 4.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Smart Metering Systems Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Smart Metering Systems insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 4 warning signs for Smart Metering Systems (of which 1 is significant!) you should know about.
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.
