IP Group Insiders Forfeit On 10% Gains After Selling Stock

Last week, IP Group Plc's (LON:IPO) stock jumped 10%, but insiders who sold UK£287k worth of stock in over the past year are likely to be in a better position. Selling at an average price of UK£0.48, which is higher than the current price, may have been the best move for these insiders because their investment would have been worth less now than when they sold.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for IP Group

IP Group Insider Transactions Over The Last Year

The CEO & Executive Director, Gregory Smith, made the biggest insider sale in the last 12 months. That single transaction was for UK£98k worth of shares at a price of UK£0.48 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of UK£0.40. So it may not shed much light on insider confidence at current levels.

In the last year IP Group insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

I will like IP Group better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our information indicates that IP Group insiders own about UK£705k worth of shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Do The IP Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded IP Group shares in the last quarter. We don't take much encouragement from the transactions by IP Group insiders. And usually insiders own more stock in the company, according to our data. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 1 warning sign for IP Group you should know about.

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.