It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Tate & Lyle plc's (LON:TATE) case, it's fantastic news for shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Tate & Lyle Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Gerard Murphy bought UK£68k worth of shares at a price of UK£6.84 per share. We do like to see buying, but this purchase was made at well below the current price of UK£7.68. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Tate & Lyle insiders may have bought shares in the last year, but they didn't sell any. 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!
Tate & Lyle is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. Insiders own 0.4% of Tate & Lyle shares, worth about UK£13m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Tate & Lyle Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Tate & Lyle shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Tate & Lyle and their transactions don't cause us concern. 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. Every company has risks, and we've spotted 2 warning signs for Tate & Lyle you should know about.
Of course Tate & Lyle may not be the best stock to buy. So you may wish to see this free collection of high quality 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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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.