As Imperial Brands PLC (LON:IMB) gains 3.8%, insiders who bought last year may be wishing they had bet higher

By
Simply Wall St
Published
April 12, 2022
LSE:IMB
Source: Shutterstock

Insiders who bought Imperial Brands PLC (LON:IMB) stock in the last 12 months were richly rewarded last week. The company's market value increased by UK£586m as a result of the stock's 3.8% gain over the same period. As a result, the stock they originally bought for UK£178k is now worth UK£194k.

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.

See our latest analysis for Imperial Brands

Imperial Brands Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Director Robert Kunze-Concewitz bought UK£156k worth of shares at a price of UK£15.58 per share. That means that an insider was happy to buy shares at around the current price of UK£16.90. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Imperial Brands insiders decided to buy shares at close to current prices.

In the last twelve months Imperial Brands insiders were buying shares, but not selling. 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!

insider-trading-volume
LSE:IMB Insider Trading Volume April 12th 2022

Imperial Brands is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Imperial Brands Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Imperial Brands insiders own 5.3% of the company, currently worth about UK£843m 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 Imperial Brands Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Imperial Brands shares in the last quarter. However, our analysis of transactions over the last year is heartening. With high insider ownership and encouraging transactions, it seems like Imperial Brands insiders think the business has merit. 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 instance, we've identified 3 warning signs for Imperial Brands (1 can't be ignored) you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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