Yahoo Finance Read This Before Buying Dechra Pharmaceuticals PLC (LON:DPH) Shares
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 before you buy or sell Dechra Pharmaceuticals PLC (LON:DPH), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
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.’
Check out our latest analysis for Dechra Pharmaceuticals
Dechra Pharmaceuticals Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by MD of Dechra Veterinary Products for Europe & Executive Director Anthony Griffin for UK£106k worth of shares, at about UK£21.15 per share. That means that an insider was selling shares at around the current price of UK£20.70. While their view may have changed since the sale, this is not a particularly positive fact. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. Anthony Griffin was the only individual insider to sell shares in the last twelve months.
You can see a visual depiction of insider transactions 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Dechra Pharmaceuticals Boast High Insider Ownership?
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’s great to see that Dechra Pharmaceuticals insiders own 1.1% of the company, worth about UK£22m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Dechra Pharmaceuticals Tell Us?
An insider sold stock recently, but they haven’t been buying. And even if we look to the last year, we didn’t see any purchases. On the plus side, Dechra Pharmaceuticals makes money, and is growing profits. While insiders do own shares, they don’t own a heap, and they have been selling. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in Dechra Pharmaceuticals, you should check out this free report on analyst forecasts for the company.
But note: Dechra Pharmaceuticals 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
