It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Saga plc (LON:SAGA).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Saga Insider Transactions Over The Last Year
Independent Chairman Patrick Henry O’Sullivan made the biggest insider purchase in the last 12 months. That single transaction was for UK£46k worth of shares at a price of UK£0.46 each. That implies that an insider found the current price of UK£0.53 per share to be enticing. 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. Happily, the Saga insiders decided to buy shares at close to current prices.
Saga insiders may have bought shares in the last year, but they didn’t sell any. You can see a visual depiction of insider transactions (by 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!
Saga is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Saga Have Bought Stock Recently
It’s good to see that Saga insiders have made notable investments in the company’s shares. Specifically, Independent Chairman Patrick Henry O’Sullivan bought UK£46k worth of shares in that time, and we didn’t record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Saga Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data isn’t picking up on much insider ownership at Saga, though insiders do hold about UK£450k worth of shares. It’s always possible we are missing something but from our data, it looks like insider ownership is minimal.
What Might The Insider Transactions At Saga Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Saga stock. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Saga 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.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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