Insiders At Georgia Capital Sold GEL3.0m In Stock, Alluding To Potential Weakness

Over the past year, many Georgia Capital PLC (LON:CGEO) insiders sold a significant stake in the company which may have piqued investors' interest. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

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.

View our latest analysis for Georgia Capital

Georgia Capital Insider Transactions Over The Last Year

In fact, the recent purchase by Independent Non-Executive Director Neil Janin was not their only acquisition of Georgia Capital shares this year. They previously made an even bigger purchase of UK£1.4m worth of shares at a price of UK£13.14 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£11.46). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing 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. Notably Neil Janin was also the biggest seller.

Happily, we note that in the last year insiders paid UK£1.6m for 126.98k shares. But they sold 238.84k shares for UK£3.0m. In total, Georgia Capital insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Georgia Capital Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Georgia Capital. We can see that Independent Non-Executive Director Neil Janin paid UK£99k for shares in the company. No-one sold. That shows some optimism about the company's future.

Does Georgia Capital Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 8.7% of Georgia Capital shares, worth about UK£35m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Georgia Capital Tell Us?

The recent insider purchase is heartening. But we can't say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Georgia Capital insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. In short they are likely aligned with shareholders. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

But note: Georgia 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.