As DS Smith Plc (LON:SMDS) gains 3.5%, insiders who bought last year may be wishing they had bet higher

Last week, DS Smith Plc (LON:SMDS) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 3.5% last week, resulting in a UK£160m increase in the company's market worth. Put another way, the original UK£297k acquisition is now worth UK£317k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for DS Smith

The Last 12 Months Of Insider Transactions At DS Smith

The Group Finance Director & Executive Director, Adrian R. Marsh, made the biggest insider sale in the last 12 months. That single transaction was for UK£148k worth of shares at a price of UK£3.59 each. That means that an insider was selling shares at around the current price of UK£3.42. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Adrian R. Marsh was the only individual insider to sell over the last year. Notably Adrian R. Marsh was also the biggest buyer, having purchased UK£297k worth of shares.

Over the last year, we can see that insiders have bought 92.69k shares worth UK£297k. But insiders sold 51.12k shares worth UK£177k. In total, DS Smith insiders bought more than they sold over the last year. They paid about UK£3.20 on average. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Have DS Smith Insiders Traded Recently?

In the last quarter there were insider sales totalling UK£148k. But that was only a smidgen more than the UK£147k worth of buying. The net selling is so small that it's hard to draw any conclusions from these recent transactions.

Does DS Smith Boast High Insider Ownership?

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 0.2% of DS Smith shares, worth about UK£9.7m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At DS Smith Tell Us?

We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more DS Smith 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. Our analysis shows 3 warning signs for DS Smith (1 is a bit concerning!) and we strongly recommend you look at these before investing.

But note: DS Smith 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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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.