Stock Analysis

As Greggs plc (LON:GRG) gains 3.2%, insiders who bought last year may be wishing they had bet higher

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Last week, Greggs plc (LON:GRG) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 3.2% last week, resulting in a UK£83m increase in the company's market worth. In other words, the original UK£290k purchase is now worth UK£322k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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Greggs Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Roger Whiteside for UK£189k worth of shares, at about UK£24.21 per share. That means that an insider was happy to buy shares at around the current price of UK£26.82. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Greggs insiders decided to buy shares at close to current prices.

In the last twelve months insiders purchased 11.99k shares for UK£290k. But they sold 4.06k shares for UK£88k. Overall, Greggs insiders were net buyers during the last year. 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!

LSE:GRG Insider Trading Volume March 24th 2023

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership Of Greggs

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Greggs insiders have about 0.1% of the stock, worth approximately UK£3.0m. We consider this fairly low insider ownership.

What Might The Insider Transactions At Greggs Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Greggs insiders bought more shares in 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Greggs.

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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