Have Insiders Been Selling Oxford Instruments plc (LON:OXIG) Shares?

By
Simply Wall St
Published
May 31, 2021
LSE:OXIG
Source: Shutterstock

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Oxford Instruments plc (LON:OXIG).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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'.

Check out our latest analysis for Oxford Instruments

Oxford Instruments Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Group Finance Director & Executive Director, Gavin Hill, sold UK£108k worth of shares at a price of UK£19.65 per share. That means that an insider was selling shares at slightly below the current price (UK£20.70). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 90% of Gavin Hill's holding. Gavin Hill was the only individual insider to sell over the last year.

The chart below shows insider transactions (by companies and 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!

insider-trading-volume
LSE:OXIG Insider Trading Volume June 1st 2021

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

Insider Ownership of Oxford Instruments

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Oxford Instruments insiders own about UK£63m worth of shares. That equates to 5.3% 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 Oxford Instruments 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 Oxford Instruments insiders. The modest level of insider ownership is, at least, some comfort. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Oxford Instruments.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.

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