Don't Ignore The Fact That This Insider Just Sold Some Shares In Record plc (LON:REC)

We wouldn't blame Record plc (LON:REC) shareholders if they were a little worried about the fact that Bob F. A. Noyen, the Chief Investment Officer recently netted about UK£735k selling shares at an average price of UK£0.49. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.

See our latest analysis for Record

Record Insider Transactions Over The Last Year

The Chairman, Neil Record, made the biggest insider sale in the last 12 months. That single transaction was for UK£1.5m worth of shares at a price of UK£0.37 each. That means that even when the share price was below the current price of UK£0.58, 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 6.4% of Neil Record's holding.

Insiders in Record didn't buy any shares in the last year. 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!

I will like Record better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. Record insiders own 47% of the company, currently worth about UK£53m based on the recent share price. 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 Do The Record Insider Transactions Indicate?

Insiders haven't bought Record 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, Record makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing 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. For example - Record has 2 warning signs we think you should be aware of.

But note: Record 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, but not derivative transactions.

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