Did K3 Capital Group PLC (LON:K3C) Insiders Sell Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in K3 Capital Group PLC (LON:K3C).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

Check out our latest analysis for K3 Capital Group

The Last 12 Months Of Insider Transactions At K3 Capital Group

Over the last year, we can see that the biggest insider sale was by the Executive Vice Chairman, Anthony John Ford, for UK£252k worth of shares, at about UK£2.52 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£2.83. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 1.6% of Anthony John Ford's holding. Anthony John Ford was the only individual insider to sell shares in the last twelve months.

Over the last year, we can see that insiders have bought 14.72k shares worth UK£25k. On the other hand they divested 100.00k shares, for UK£252k. 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does K3 Capital Group 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. We usually like to see fairly high levels of insider ownership. K3 Capital Group insiders own about UK£55m worth of shares. That equates to 29% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About K3 Capital Group Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of K3 Capital Group insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of 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. For example, K3 Capital Group has 3 warning signs (and 1 which is concerning) we think you should know about.

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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