Have Literacy Capital Insiders Been Selling Stock?

Anyone interested in Literacy Capital plc (LON:BOOK) should probably be aware that the Independent Non Executive Director, Kevin Dady, recently divested UK£98k worth of shares in the company, at an average price of UK£4.90 each. On the bright side, that sale was only 3.1% of their holding, so we doubt it's very meaningful, on its own.

View our latest analysis for Literacy Capital

The Last 12 Months Of Insider Transactions At Literacy Capital

In fact, the recent sale by Kevin Dady was the biggest sale of Literacy Capital shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of UK£4.94, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 3.1% of Kevin Dady's stake.

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!

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

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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Literacy Capital insiders own 69% of the company, worth about UK£205m. 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 Does This Data Suggest About Literacy Capital Insiders?

An insider hasn't bought Literacy Capital stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. On the plus side, Literacy Capital makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. 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 3 warning signs for Literacy Capital (2 can't be ignored!) and we strongly recommend you look at them before investing.

But note: Literacy Capital 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 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.