We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Centamin plc (LON:CEY), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Centamin Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Heidi Brown for UK£163k worth of shares, at about UK£1.64 per share. That is hardly a positive sign, even though it took place above the latest price (UK£1.03). So it may not shed much light on insider confidence at current levels. Heidi Brown was the only individual insider to sell over the last year.
Over the last year, we can see that insiders have bought 115.00k shares worth UK£143k. But insiders sold 100.00k shares worth UK£163k. You can see the insider transactions 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Centamin Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Centamin insiders own about UK£8.3m worth of shares (which is 0.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Centamin Insider Transactions Indicate?
The fact that there have been no Centamin insider transactions recently certainly doesn’t bother us. Our analysis of Centamin insider transactions leaves us unenthusiastic. And we’re not picking up on high enough insider ownership to give us any comfort. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Centamin.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.