Independent Chairman Bruce Thompson Just Bought 100% More Shares In Avon Rubber p.l.c. (LON:AVON)

Investors who take an interest in Avon Rubber p.l.c. (LON:AVON) should definitely note that the Independent Chairman, Bruce Thompson, recently paid UK£30.60 per share to buy UK£92k worth of the stock. That certainly has us anticipating the best, especially since they thusly increased their own holding by 100%, potentially signalling some real optimism.

See our latest analysis for Avon Rubber

The Last 12 Months Of Insider Transactions At Avon Rubber

In the last twelve months, the biggest single sale by an insider was when the General Counsel & Company Secretary, Miles Ingrey-Counter, sold UK£291k worth of shares at a price of UK£23.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£31.55. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 47% of Miles Ingrey-Counter's holding.

In total, Avon Rubber insiders sold more than they bought over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Avon Rubber better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by 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. Our data suggests Avon Rubber insiders own 0.3% of the company, worth about UK£3.4m. We prefer to see high levels of insider ownership.

So What Do The Avon Rubber Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. We're not thrilled with the relatively low insider ownership and the longer term transaction history. But we like the recent purchasing. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 3 warning signs for Avon Rubber (1 is potentially serious) you should be aware of.

But note: Avon Rubber 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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