Gooch & Housego Gains 13%, Insider Trades Reap Benefit

Gooch & Housego PLC (LON:GHH) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 13%, resulting in a UK£16m rise in the company's market capitalisation. Put another way, the original UK£110k acquisition is now worth UK£140k.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Gooch & Housego

Gooch & Housego Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Gary Bullard for UK£61k worth of shares, at about UK£4.05 per share. Even though the purchase was made at a significantly lower price than the recent price (UK£5.48), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

In the last twelve months Gooch & Housego insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Are Gooch & Housego Insiders Buying Or Selling?

Over the last three months, we've seen a bit of insider buying at Gooch & Housego. Non-Executive Director Susan Jane Searle purchased UK£5.6k worth of shares in that period. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership Of Gooch & Housego

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. Our information indicates that Gooch & Housego insiders own about UK£266k worth of shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. This level of insider ownership is notably low, and not very encouraging.

So What Does This Data Suggest About Gooch & Housego Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. 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 Gooch & Housego insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Gooch & Housego. For instance, we've identified 2 warning signs for Gooch & Housego (1 makes us a bit uncomfortable) you should be aware of.

But note: Gooch & Housego 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.