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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in Dixons Carphone plc (LON:DC.).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
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 Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Dixons Carphone Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Group Chief Executive & Director Alex Baldock bought UK£171k worth of shares at a price of UK£1.14 per share. That means that an insider was happy to buy shares at around the current price of UK£1.19. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it’s less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we’re pleased to report that the insider purchases were made at close to current prices.
In the last twelve months insiders paid UK£556k for 489k shares purchased. While Dixons Carphone insiders bought shares last year, they didn’t sell. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Dixons Carphone Insiders Bought Stock Recently
Over the last quarter, Dixons Carphone insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought UK£556k worth of shares. This makes one think the business has some good points.
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. It’s great to see that Dixons Carphone insiders own 14% of the company, worth about UK£199m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Dixons Carphone Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don’t feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Dixons Carphone. That’s what I like to see! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Dixons Carphone.
Of course Dixons Carphone may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.