In spite of Diploma PLC's recent pullback, insiders still gained about UK£4.6k after buying earlier this year.

Diploma PLC (LON:DPLM) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 3.6% decline in the stock price. Reason being, despite the recent loss, insiders original purchase value of UK£64k is now worth UK£69k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Diploma

The Last 12 Months Of Insider Transactions At Diploma

Over the last year, we can see that the biggest insider purchase was by Chairman of the Board David Lowden for UK£64k worth of shares, at about UK£25.76 per share. So it's clear an insider wanted to buy, at around the current price, which is UK£27.60. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. David Lowden was the only individual insider to buy during the last year.

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!

Diploma is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership Of Diploma

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. Insiders own 0.1% of Diploma shares, worth about UK£4.6m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Diploma Insiders?

The fact that there have been no Diploma insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Diploma stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Diploma 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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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.