Whilst it may not be a huge deal, we thought it was good to see that the Breedon Group plc (LON:BREE) Chief Financial Officer, James Brotherton, recently bought UK£65k worth of stock, for UK£0.87 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
The Last 12 Months Of Insider Transactions At Breedon Group
Over the last year, we can see that the biggest insider sale was by the Managing Director of Breedon Cement, Jude Lagan, for UK£208k worth of shares, at about UK£0.83 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of UK£0.84. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 47% of Jude Lagan's stake. The only individual insider seller over the last year was Jude Lagan.
Happily, we note that in the last year insiders paid UK£89k for 102.50k shares. On the other hand they divested 250.00k shares, for UK£208k. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Breedon Group Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that Breedon Group insiders own about UK£5.7m worth of shares (which is 0.4% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Breedon Group Insiders?
It's certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. Neither the level of insider ownership, nor the transactions over the last twelve months inspire us, but we think the recent buying is positive. 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. While conducting our analysis, we found that Breedon Group has 1 warning sign and it would be unwise to ignore this.
But note: Breedon Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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