Insider Spends UK£248k Buying More Shares In Dowlais Group

Investors who take an interest in Dowlais Group plc (LON:DWL) should definitely note that the CEO & Director, Liam Butterworth, recently paid UK£0.60 per share to buy UK£248k worth of the stock. That's a very decent purchase to our minds and it grew their holding by a solid 22%.

Check out our latest analysis for Dowlais Group

Dowlais Group Insider Transactions Over The Last Year

In fact, the recent purchase by CEO & Director Liam Butterworth was not their only acquisition of Dowlais Group shares this year. Earlier in the year, they paid UK£0.81 per share in a UK£256k purchase. That means that an insider was happy to buy shares at above the current price of UK£0.65. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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.

In the last twelve months Dowlais Group insiders were buying shares, but not selling. Their average price was about UK£0.73. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. 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£2.2m worth of Dowlais Group stock, about 0.2% of the company. We consider this fairly low insider ownership.

So What Do The Dowlais Group Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Dowlais Group stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Dowlais Group. At Simply Wall St, we found 1 warning sign for Dowlais Group that deserve your attention before buying any shares.

Of course Dowlais 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 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.