CEO & Director of Capita Picks Up 100% More Stock

Whilst it may not be a huge deal, we thought it was good to see that the Capita plc (LON:CPI) CEO & Director, Adolfo Hernandez, recently bought UK£46k worth of stock, for UK£0.14 per share. Even though that isn't a massive buy, it did increase their holding by 100%, which is arguably a good sign.

View our latest analysis for Capita

The Last 12 Months Of Insider Transactions At Capita

Over the last year, we can see that the biggest insider purchase was by Executive Officer Jonathan Lewis for UK£94k worth of shares, at about UK£0.17 per share. That means that an insider was happy to buy shares at above the current price of UK£0.13. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares. 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 Capita insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Capita 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 Capita Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about UK£536k worth of Capita shares. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At Capita Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Capita insiders are expecting a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Capita. To help with this, we've discovered 2 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Capita.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.