Shareholders may not want to ignore the UK£525k worth sales made by Henry Boot PLC (LON:BOOT) insiders this past year

By
Simply Wall St
Published
March 15, 2022
LSE:BOOT
Source: Shutterstock

While it’s been a great week for Henry Boot PLC (LON:BOOT) shareholders after stock gained 12%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell UK£525k worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Henry Boot

The Last 12 Months Of Insider Transactions At Henry Boot

The Non-Independent Non-Executive Director, Jonathan Sykes, made the biggest insider sale in the last 12 months. That single transaction was for UK£525k worth of shares at a price of UK£2.76 each. That means that even when the share price was below the current price of UK£3.17, 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. It is worth noting that this sale was only 0.9% of Jonathan Sykes's holding. Jonathan Sykes was the only individual insider to sell shares in the last twelve months.

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!

insider-trading-volume
LSE:BOOT Insider Trading Volume March 15th 2022

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

Insider Ownership of Henry Boot

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. Henry Boot insiders own 20% of the company, currently worth about UK£85m 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 Do The Henry Boot Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Henry Boot insiders. The modest level of insider ownership is, at least, some comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 2 warning signs for Henry Boot that deserve your attention before buying any shares.

But note: Henry Boot 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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