Insider Buying: Midwich Group Group MD & Director Bought UK£410k Of Shares

Those following along with Midwich Group plc (LON:MIDW) will no doubt be intrigued by the recent purchase of shares by Stephen Fenby, Group MD & Director of the company, who spent a stonking UK£410k on stock at an average price of UK£2.73. While that only increased their holding size by 0.9%, it is still a big swing by our standards.

Check out our latest analysis for Midwich Group

The Last 12 Months Of Insider Transactions At Midwich Group

Notably, that recent purchase by Stephen Fenby is the biggest insider purchase of Midwich Group shares that we've seen in the last year. That means that even when the share price was higher than UK£2.65 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Stephen Fenby was the only individual insider to buy shares in the last twelve months.

Stephen Fenby purchased 200.00k shares over the year. The average price per share was UK£2.99. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Midwich Group insiders own 18% of the company, worth about UK£48m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Midwich Group Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Midwich Group we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Midwich Group has 2 warning signs and it would be unwise to ignore these.

But note: Midwich Group 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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