Who Has Been Buying The Restaurant Group plc (LON:RTN) Shares?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell The Restaurant Group plc (LON:RTN), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

Check out our latest analysis for Restaurant Group

The Last 12 Months Of Insider Transactions At Restaurant Group

Over the last year, we can see that the biggest insider purchase was by CFO & Director Kirk Davis for UK£99k worth of shares, at about UK£1.10 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.94). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Restaurant Group insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around UK£0.63. We don't deny that it is nice to see insiders buying stock 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 want to know exactly who sold, for how much, and when, simply click on the graph below!

Restaurant Group 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.

Insider Ownership

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. Based on our data, Restaurant Group insiders have about 0.2% of the stock, worth approximately UK£878k. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Restaurant Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. 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 Restaurant Group insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Restaurant Group. For instance, we've identified 3 warning signs for Restaurant Group (1 doesn't sit too well with us) you should be aware of.

Of course Restaurant Group 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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