We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in GVC Holdings PLC (LON:GVC).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
The Last 12 Months Of Insider Transactions At GVC Holdings
J. Paul Bowtell made the biggest insider purchase in the last 12 months. That single transaction was for UK£733k worth of shares at a price of UK£7.33 each. That means that an insider was happy to buy shares at above the current price of UK£5.95. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Happily, we note that in the last year insiders bought 168k shares for a total of UK£1.1m. While GVC Holdings insiders bought shares last year, they didn’t sell. Their average price was about UK£6.59. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
GVC Holdings 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.
GVC Holdings Insiders Bought Stock Recently
Over the last quarter, GVC Holdings insiders have spent a meaningful amount on shares. Overall, 4 insiders shelled out UK£336k for shares in the company — and none sold. That shows some optimism about the company’s future.
Insider Ownership of GVC Holdings
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 0.4% of GVC Holdings shares, worth about UK£13m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The GVC Holdings Insider Transactions Indicate?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But we don’t feel the same about the fact the company is making losses. Given that insiders also own a fair bit of GVC Holdings we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in GVC Holdings, you should check out this free report on analyst forecasts for the company.
But note: GVC Holdings 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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.