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 Glanbia plc (ISE:GL9).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
See our latest analysis for Glanbia
The Last 12 Months Of Insider Transactions At Glanbia
Over the last year, we can see that the biggest insider purchase was by Group Finance Director & Executive Director Mark Garvey for €256k worth of shares, at about €9.75 per share. That means that an insider was happy to buy shares at above the current price of €9.50. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. To us, it’s very important to consider the price insiders pay for shares. 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. Notably Mark Garvey was also the biggest seller.
Over the last year, we can see that insiders have bought 51.71k shares worth €537k. On the other hand they divested 12168 shares, for €119k. Overall, Glanbia insiders were net buyers during the last year. 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!
Glanbia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Glanbia Insiders Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Glanbia. We can see that Group Finance Director & Executive Director Mark Garvey paid €256k for shares in the company. On the other hand, Group Finance Director & Executive Director Mark Garvey netted €119k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Does Glanbia Boast High 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 our data, it seems that Glanbia insiders own 0.3% of the company, worth about €9.0m. However, it’s possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we’re not overly impressed by these holdings.
What Might The Insider Transactions At Glanbia Tell Us?
The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Glanbia insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Every company has risks, and we’ve spotted 2 warning signs for Glanbia you should know about.
Of course Glanbia 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 editorial-team@simplywallst.com. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.