Burford Capital Insiders Sell US$18m Of Stock, Possibly Signalling Caution

Over the past year, many Burford Capital Limited (LON:BUR) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying versus if they selling is usually more beneficial, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Burford Capital

Burford Capital Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Chief Investment Officer Jonathan Molot for UK£18m worth of shares, at about UK£10.04 per share. That implies that an insider found the current price of UK£10.67 per share to be enticing. 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. The good news for Burford Capital share holders is that insiders were buying at near the current price. Notably Jonathan Molot was also the biggest seller.

Over the last year, we can see that insiders have bought 1.81m shares worth UK£18m. But insiders sold 1.81m shares worth UK£18m. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Burford Capital

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Burford Capital insiders own about UK£200m worth of shares (which is 8.6% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Burford Capital Insiders?

We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. It's great to see high levels of insider ownership, but looking back over the last year, we'd need to see more buying to gain confidence from the Burford Capital insider transactions. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 4 warning signs for Burford Capital (2 are concerning!) and we strongly recommend you look at these before investing.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.