Need To Know: Senior plc (LON:SNR) Insiders Have Been Buying Shares

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Senior plc (LON:SNR).

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Senior

The Last 12 Months Of Insider Transactions At Senior

In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Ian King bought UK£130k worth of shares at a price of UK£0.86 per share. That implies that an insider found the current price of UK£0.94 per share to be enticing. 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 purchases were made at close to current prices.

Happily, we note that in the last year insiders paid UK£431k for 643.77k shares. But insiders sold 71.27k shares worth UK£66k. Overall, Senior insiders were net buyers during the last year. They paid about UK£0.67 on average. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Senior 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 Senior

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Senior insiders have about 0.4% of the stock, worth approximately UK£1.5m. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Senior Tell Us?

It doesn't really mean much that no insider has traded Senior shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Senior insiders bought more shares in the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Senior is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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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. 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.
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