Have Insiders Been Buying De La Rue plc (LON:DLAR) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell De La Rue plc (LON:DLAR), you may well want to know whether insiders have been buying or selling.

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.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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 De La Rue

De La Rue Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chairman Kevin Loosemore for UK£1m worth of shares, at about UK£1.10 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£1.62. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Happily, we note that in the last year insiders paid UK£2.1m for 1.62m shares. On the other hand they divested 500.00k shares, for UK£827k. Overall, De La Rue insiders were net buyers during the last year. They paid about UK£1.27 on average. It is certainly positive to see 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

De La Rue 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.

De La Rue Insiders Bought Stock Recently

There was some insider buying at De La Rue over the last quarter. Chairman Kevin Loosemore bought UK£843k worth in that time. However, Chairman Kevin Loosemore netted UK£827k for sales. While it's good to see the insider buying, the net amount bought isn't enough for us to gain much confidence from it.

Insider Ownership of De La Rue

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Based on our data, De La Rue insiders have about 0.7% of the stock, worth approximately UK£2.1m. We consider this fairly low insider ownership.

So What Does This Data Suggest About De La Rue Insiders?

We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if De La Rue insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for De La Rue (1 is concerning!) that we believe deserve your full attention.

Of course De La Rue may not be the best stock to buy. So you may wish to see this free collection of high quality 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. 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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