Positive Signs As Multiple Insiders Buy Advanced Medical Solutions Group Stock

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Advanced Medical Solutions Group plc's (LON:AMS) 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.

See our latest analysis for Advanced Medical Solutions Group

The Last 12 Months Of Insider Transactions At Advanced Medical Solutions Group

Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Andrew Meredith for UK£79k worth of shares, at about UK£1.96 per share. That means that even when the share price was higher than UK£1.92 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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. Notably Andrew Meredith was also the biggest seller.

Over the last year, we can see that insiders have bought 90.85k shares worth UK£176k. On the other hand they divested 40.50k shares, for UK£79k. In total, Advanced Medical Solutions Group insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Advanced Medical Solutions Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own UK£3.9m worth of Advanced Medical Solutions Group stock, about 0.9% of the company. We consider this fairly low insider ownership.

What Might The Insider Transactions At Advanced Medical Solutions Group Tell Us?

It doesn't really mean much that no insider has traded Advanced Medical Solutions Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Advanced Medical Solutions Group stock. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Advanced Medical Solutions Group has 1 warning sign we think 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.