Insider Stock Buying Reaches UK£1.31m On Dowlais Group

Quite a few insiders have dramatically grown their holdings in Dowlais Group plc (LON:DWL) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Dowlais Group

The Last 12 Months Of Insider Transactions At Dowlais Group

Over the last year, we can see that the biggest insider purchase was by CEO & Director Liam Butterworth for UK£496k worth of shares, at about UK£1.21 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.73). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Dowlais Group insiders may have bought shares in the last year, but they didn't sell any. They paid about UK£1.03 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

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.

Dowlais Group Insiders Bought Stock Recently

Over the last quarter, Dowlais Group insiders have spent a meaningful amount on shares. In total, insiders bought UK£411k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Dowlais Group 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Dowlais Group insiders own about UK£4.1m worth of shares (which is 0.4% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Dowlais Group Tell Us?

The recent insider purchases are heartening. 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. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Dowlais Group insiders are expecting a bright 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. You'd be interested to know, that we found 1 warning sign for Dowlais Group and we suggest you have a look.

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.