Should You Review Recent Insider Transactions At Victoria plc (LON:VCP)?

By
Simply Wall St
Published
February 16, 2021
AIM:VCP

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 Victoria plc (LON:VCP).

What Is Insider Selling?

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 equally, we would consider it foolish to ignore insider transactions altogether. 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'.

See our latest analysis for Victoria

Victoria Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Group Finance Director & Executive Director, Michael Scott, sold UK£1.1m worth of shares at a price of UK£6.05 per share. That means that even when the share price was below the current price of UK£7.20, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 42% of Michael Scott's holding. Michael Scott was the only individual insider to sell shares in the last twelve months.

Happily, we note that in the last year insiders paid UK£204k for 86.02k shares. But they sold 176.73k shares for UK£1.1m. 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!

insider-trading-volume
AIM:VCP Insider Trading Volume February 16th 2021

I will like Victoria better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Victoria Insiders Are Selling The Stock

The last three months saw significant insider selling at Victoria. Specifically, Group Finance Director & Executive Director Michael Scott ditched UK£1.1m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Does Victoria Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Victoria insiders own 20% of the company, currently worth about UK£166m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Victoria Insiders?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 3 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in Victoria.

But note: Victoria may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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