We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Cineworld Group plc (LON:CINE), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
Check out our latest analysis for Cineworld Group
Cineworld Group Insider Transactions Over The Last Year
The Senior Independent Director Eric Senat made the biggest insider purchase in the last 12 months. That single transaction was for UK£100k worth of shares at a price of UK£0.23 each. We do like to see buying, but this purchase was made at well below the current price of UK£0.98. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Cineworld Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Cineworld Group 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. We usually like to see fairly high levels of insider ownership. From our data, it seems that Cineworld Group insiders own 0.3% of the company, worth about UK£3.6m. However, it's possible that insiders might have an indirect interest through a more complex structure. Whilst better than nothing, we're not overly impressed by these holdings.
So What Do The Cineworld Group Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Cineworld Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Cineworld Group insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Cineworld Group. Case in point: We've spotted 2 warning signs for Cineworld Group you should be aware of, and 1 of them can't be ignored.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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. 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.
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About LSE:CINE
Good value with weak fundamentals.
