Mothercare Non-Executive Chairman Acquires 31% More Stock

Even if it's not a huge purchase, we think it was good to see that Clive Whiley, the Non-Executive Chairman of Mothercare plc (LON:MTC) recently shelled out UK£47k to buy stock, at UK£0.05 per share. While we're hesitant to get too excited about a purchase of that size, we do note it increased their holding by a solid 31%.

View our latest analysis for Mothercare

The Last 12 Months Of Insider Transactions At Mothercare

Notably, that recent purchase by Non-Executive Chairman Clive Whiley was not the only time they bought Mothercare shares this year. They previously made an even bigger purchase of UK£65k worth of shares at a price of UK£0.07 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.046). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Happily, we note that in the last year insiders paid UK£172k for 2.48m shares. But insiders sold 929.00k shares worth UK£65k. In the last twelve months there was more buying than selling by Mothercare insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Mothercare is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Mothercare Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Mothercare insiders own about UK£3.9m worth of shares (which is 15% of the company). But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Mothercare Tell Us?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. The transactions are fine but it'd be more encouraging if Mothercare insiders bought more shares in the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 3 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Mothercare.

But note: Mothercare 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 of direct interests only, but not derivative transactions or indirect interests.

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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.