Insiders At Irish Continental Group Sold €5.6m In Stock, Alluding To Potential Weakness

In the last year, many Irish Continental Group plc (LON:ICGC) insiders sold a substantial stake in the company which may have sparked shareholders' attention. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Irish Continental Group

The Last 12 Months Of Insider Transactions At Irish Continental Group

In the last twelve months, the biggest single purchase by an insider was when MD, CEO & Executive Director Eamonn Rothwell bought UK£5.5m worth of shares at a price of UK£4.63 per share. That means that even when the share price was higher than UK£4.56 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Notably Eamonn Rothwell was also the biggest seller.

In the last twelve months insiders purchased 1.22m shares for UK£5.6m. But they sold 1.22m shares for UK£5.6m. All up, insiders sold more shares in Irish Continental Group than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Irish Continental Group Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Irish Continental Group. In total, insiders dumped UK£121k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership Of Irish Continental Group

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Irish Continental Group insiders own 19% of the company, currently worth about UK£146m 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 Does This Data Suggest About Irish Continental Group Insiders?

Insiders haven't bought Irish Continental Group stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. But since Irish Continental Group is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Irish Continental Group you should be aware of.

But note: Irish Continental 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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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.