Have Insiders Been Buying Royal Mail plc (LON:RMG) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Royal Mail plc (LON:RMG).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Royal Mail

Royal Mail Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Rico Back bought UK£537k worth of shares at a price of UK£1.80 per share. Even though the purchase was made at a significantly lower price than the recent price (UK£3.60), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Royal Mail is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From what we can see in our data, insiders own only about UK£697k worth of Royal Mail shares. We might be missing something but that seems like very low insider ownership.

What Might The Insider Transactions At Royal Mail Tell Us?

It doesn't really mean much that no insider has traded Royal Mail shares in the last quarter. 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 Royal Mail insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Royal Mail. At Simply Wall St, we found 3 warning signs for Royal Mail that deserve your attention before buying any shares.

Of course Royal Mail may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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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. 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.
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