Yahoo Finance As Smiths Group plc (LON:SMIN) gains 4.8%, insiders who bought last year may be wishing they had bet higher
Smiths Group plc (LON:SMIN) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 4.8%, resulting in a UK£270m rise in the company's market capitalisation. As a result, their original purchase of UK£193k worth of stock is now worth UK£207k.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
See our latest analysis for Smiths Group
Smiths Group Insider Transactions Over The Last Year
The CFO & Director John Shipsey made the biggest insider purchase in the last 12 months. That single transaction was for UK£99k worth of shares at a price of UK£14.42 each. That implies that an insider found the current price of UK£15.64 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Smiths Group share holders is that insiders were buying at near the current price.
Smiths Group insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Smiths Group Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Smiths Group. Not only was there no selling that we can see, but they collectively bought UK£155k worth of shares. This makes one think the business has some good points.
Does Smiths Group Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£2.2m worth of Smiths Group stock, about 0.04% of the company. We prefer to see high levels of insider ownership.
So What Do The Smiths Group Insider Transactions Indicate?
It is good to see recent purchasing. 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 Smiths Group insiders are expecting a bright future. 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. In terms of investment risks, we've identified 2 warning signs with Smiths Group and understanding them should be part of your investment process.
Of course Smiths 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
