Positive Signs As Multiple Insiders Buy St. James's Place Stock

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of St. James's Place plc (LON:STJ), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for St. James's Place

St. James's Place Insider Transactions Over The Last Year

The insider Andrew Croft made the biggest insider purchase in the last 12 months. That single transaction was for UK£248k worth of shares at a price of UK£6.25 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£4.15). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

In the last twelve months St. James's Place insiders were buying shares, but not selling. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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. From looking at our data, insiders own UK£3.5m worth of St. James's Place stock, about 0.2% of the company. We consider this fairly low insider ownership.

So What Do The St. James's Place Insider Transactions Indicate?

It doesn't really mean much that no insider has traded St. James's Place shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think St. James's Place insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for St. James's Place (1 is a bit unpleasant!) that we believe deserve your full attention.

But note: St. James's Place 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.