Multiple insiders bought The Sage Group plc (LON:SGE) stock earlier this year, a positive sign for shareholders

By
Simply Wall St
Published
February 24, 2022
LSE:SGE
Source: Shutterstock

When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in The Sage Group plc's (LON:SGE) instance, it's good news for shareholders.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Sage Group

The Last 12 Months Of Insider Transactions At Sage Group

Over the last year, we can see that the biggest insider purchase was by Chief Operating Officer Lee Perkins for UK£88k worth of shares, at about UK£5.89 per share. Even though the purchase was made at a significantly lower price than the recent price (UK£6.78), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While Sage Group insiders bought shares during the last year, they didn't sell. 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!

insider-trading-volume
LSE:SGE Insider Trading Volume February 24th 2022

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.

Insiders at Sage Group Have Bought Stock Recently

There was some insider buying at Sage Group over the last quarter. CEO & Executive Director Stephen Hare purchased UK£20k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership of Sage Group

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Sage Group insiders own about UK£20m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Sage Group Insiders?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Sage Group insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Sage Group.

Of course Sage Group 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. We currently account for open market transactions and private dispositions, but not derivative transactions.

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