We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in Inland Homes plc (LON:INL).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
The Last 12 Months Of Insider Transactions At Inland Homes
The insider Terry Roydon made the biggest insider purchase in the last 12 months. That single transaction was for UK£75k worth of shares at a price of UK£0.50 each. Even though the purchase was made at a significantly lower price than the recent price (UK£0.60), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 175.14k shares for UK£89k. But insiders sold 175.20k shares worth UK£89k. In the last twelve months there was more buying than selling by Inland Homes insiders. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Are Inland Homes Insiders Buying Or Selling?
We saw insider selling worth UK£14k in the last three months. However that only slightly eclipses the UK£14k worth of purchases. The net selling is so small that it's hard to draw any conclusions from these recent transactions.
Does Inland Homes 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 19% of Inland Homes shares, worth about UK£27m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Inland Homes Insiders?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Inland Homes and we see no evidence to suggest they are worried about the future. 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. Every company has risks, and we've spotted 3 warning signs for Inland Homes (of which 1 is potentially serious!) you should know about.
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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