We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Barclays PLC (LON:BARC).
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 on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Barclays Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Ashok Vaswani sold UK£732k worth of shares at a price of UK£2.06 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of UK£1.68. So it may not tell us anything about how insiders feel about the current share price.
Over the last year, we can see that insiders have bought 1.23m shares worth UK£2.2m. But insiders sold 435.39k shares worth UK£878k. In total, Barclays insiders bought more than they sold over the last year. The average buy price was around UK£1.81. These transactions suggest that insiders have considered the current price of UK£1.68 attractive. The chart below shows insider transactions (by 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 plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders at Barclays Have Bought Stock Recently
At Barclays,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, 13 insiders bought UK£208k worth of shares in that time. But Group General Counsel Robert Hoyt sold shares worth UK£82k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Barclays 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.08% of Barclays shares, worth about UK£22m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Barclays Tell Us?
It’s certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Barclays we think they are probably pretty confident of a bright future. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Barclays may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.