Imperial Brands Insider Ups Holding By 132% During Year

From what we can see, insiders were net buyers in Imperial Brands PLC's (LON:IMB ) during the past 12 months. That is, insiders acquired the stock in greater numbers than they sold it.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Imperial Brands

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Director Alan Johnson for UK£40k worth of shares, at about UK£28.62 per share. So it's clear an insider wanted to buy, at around the current price, which is UK£31.71. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider bought shares at close to current prices. Alan Johnson was the only individual insider to buy during the last year.

Alan Johnson purchased 2.00k shares over the year. The average price per share was UK£29.23. 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!

Check out our latest analysis for Imperial Brands

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Insider Ownership Of Imperial Brands

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Imperial Brands insiders own 6.3% of the company, worth about UK£1.6b. 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 Does This Data Suggest About Imperial Brands Insiders?

We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. However, our analysis of transactions over the last year is heartening. Judging from their transactions, and high insider ownership, Imperial Brands insiders feel good about the company's future. 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. While conducting our analysis, we found that Imperial Brands has 2 warning signs and it would be unwise to ignore them.

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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.