Insiders who sold Ideagen plc (LON:IDEA) earlier this year probably made the right call as market cap dropped by UK£38m

By
Simply Wall St
Published
February 22, 2022
AIM:IDEA
Source: Shutterstock

By selling UK£23k worth of Ideagen plc (LON:IDEA) stock at an average sell price of UK£2.91 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 4.7% last week, the company's market value declined by UK£38m, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Ideagen

The Last 12 Months Of Insider Transactions At Ideagen

While there weren't any large insider transactions in the last twelve months, it's still worth looking at the trading.

Happily, we note that in the last year insiders paid UK£16.8 for 6.00 shares. On the other hand they divested 8.00k shares, for UK£23k. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
AIM:IDEA Insider Trading Volume February 22nd 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

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. We usually like to see fairly high levels of insider ownership. Ideagen insiders own about UK£17m worth of shares. That equates to 2.2% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Ideagen Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Ideagen insiders. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ideagen. Be aware that Ideagen is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...

But note: Ideagen 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.