Dowlais Group Insiders Added UK£738.8k Of Stock To Their Holdings

When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Dowlais Group plc's (LON:DWL) instance, it's good news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Dowlais Group

The Last 12 Months Of Insider Transactions At Dowlais Group

The CEO & Director Liam Butterworth made the biggest insider purchase in the last 12 months. That single transaction was for UK£256k worth of shares at a price of UK£0.81 each. That means that even when the share price was higher than UK£0.59 (the recent price), an insider wanted to purchase shares. 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. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Dowlais Group insiders may have bought shares in the last year, but they didn't sell any. They paid about UK£0.71 on average. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Dowlais Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own UK£2.3m worth of Dowlais Group stock, about 0.3% of the company. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Dowlais Group Tell Us?

The fact that there have been no Dowlais Group insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Dowlais Group insiders are doubting the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. For example, Dowlais Group has 2 warning signs (and 1 which is significant) we think you should know about.

But note: Dowlais Group 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.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.