Insider Buying: The Avon Protection plc (LON:AVON) Independent Chairman Just Bought 45% More Shares

By
Simply Wall St
Published
February 25, 2022
LSE:AVON
Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Bruce Thompson, the Independent Chairman of Avon Protection plc (LON:AVON) recently shelled out UK£50k to buy stock, at UK£10.09 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 45%.

See our latest analysis for Avon Protection

Avon Protection Insider Transactions Over The Last Year

In fact, the recent purchase by Independent Chairman Bruce Thompson was not their only acquisition of Avon Protection shares this year. They previously made an even bigger purchase of UK£105k worth of shares at a price of UK£20.90 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£10.58). Their view may have changed since then, but at least it shows they felt optimistic at the time. 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.

While Avon Protection insiders bought shares during the last year, they didn't sell. The average buy price was around UK£15.80. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

insider-trading-volume
LSE:AVON Insider Trading Volume February 25th 2022

Avon Protection is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Avon Protection 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 suggests Avon Protection insiders own 0.4% of the company, worth about UK£1.4m. We consider this fairly low insider ownership.

So What Does This Data Suggest About Avon Protection Insiders?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. 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 Avon Protection stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Avon Protection. Every company has risks, and we've spotted 1 warning sign for Avon Protection you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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