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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in easyJet plc (LON:EZJ).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
The Last 12 Months Of Insider Transactions At easyJet
CFO, Chief Information Officer & Executive Director Andrew Findlay made the biggest insider purchase in the last 12 months. That single transaction was for UK£147k worth of shares at a price of UK£11.34 each. That means that an insider was happy to buy shares at above the current price of UK£10.17. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Andrew Findlay was also the biggest seller, having sold UK£107k worth of shares.
In the last twelve months insiders purchased 13776 shares for UK£157k. But they sold 9500 for UK£107k. Overall, easyJet insiders were net buyers last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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 easyJet Have Bought Stock Recently
We saw some easyJet insider buying shares in the last three months. Independent Non-Executive Director Julie Southern purchased UK£9.9k worth of shares in that period. It’s good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. easyJet insiders own 33% of the company, currently worth about UK£1.4b based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The easyJet Insider Transactions Indicate?
Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, easyJet insiders feel good about the company’s future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for easyJet.
But note: easyJet 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.