As Virgin Money UK PLC's (LON:VMUK)) market cap dropped by UK£93m, insiders who sold UK£722k worth of stock were able to offset their losses

By
Simply Wall St
Published
November 13, 2021
LSE:VMUK
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling UK£722k worth of Virgin Money UK PLC (LON:VMUK) stock at an average sell price of UK£1.95 during the past year. After the stock price dropped 3.6% last week, the company's market value declined by UK£93m, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Virgin Money UK

The Last 12 Months Of Insider Transactions At Virgin Money UK

Over the last year, we can see that the biggest insider sale was by the Chief Customer Experience Officer, Fergus Murphy, for UK£417k worth of shares, at about UK£2.04 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (UK£1.71). So it may not tell us anything about how insiders feel about the current share price. Notably Fergus Murphy was also the biggest buyer, having purchased UK£277k worth of shares.

Happily, we note that in the last year insiders paid UK£277k for 198.44k shares. On the other hand they divested 370.00k shares, for UK£722k. All up, insiders sold more shares in Virgin Money UK than they bought, over the last year. They sold for an average price of about UK£1.95. Insider selling doesn't make us excited to buy. But the selling was at much higher prices than the current share price (UK£1.71), so it probably doesn't tell us a lot about the value on offer today. 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!

insider-trading-volume
LSE:VMUK Insider Trading Volume November 14th 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Have Virgin Money UK Insiders Traded Recently?

Chief Brand Officer Helen Page bought just UK£80.1 worth of shares in that time. That's not much at all. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.

Insider Ownership of Virgin Money UK

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From our data, it seems that Virgin Money UK insiders own 0.2% of the company, worth about UK£4.6m. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Virgin Money UK Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. The insider transactions at Virgin Money UK are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Virgin Money UK. Case in point: We've spotted 1 warning sign for Virgin Money UK you should be aware of.

But note: Virgin Money UK 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, but not derivative transactions.

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