We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Collagen Solutions plc (LON:COS).
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
The Last 12 Months Of Insider Transactions At Collagen Solutions
Non-Executive Chairman David Evans made the biggest insider purchase in the last 12 months. That single transaction was for UK£86k worth of shares at a price of UK£0.028 each. That implies that an insider found the current (approximate) price enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
In the last twelve months insiders paid UK£119k for 4.01m shares purchased. In total, Collagen Solutions insiders bought more than they sold over the last year. The average buy price was around UK£0.03. It’s great to see insiders putting their own cash into the company’s stock, albeit at below the recent share price (UK£0.034). You can see the insider transactions 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!
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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. Collagen Solutions insiders own about UK£2.4m worth of shares. That equates to 18% of the company. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Collagen Solutions Insiders?
It doesn’t really mean much that no insider has traded Collagen Solutions shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Collagen Solutions and we see no evidence to suggest they are worried about the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Collagen Solutions.
But note: Collagen Solutions 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.
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 email@example.com.