Yahoo Finance Should You Take Comfort From Insider Transactions At Centrica plc (LON:CNA)?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 shareholders might well want to know whether insiders have been buying or selling shares in Centrica plc (LON:CNA).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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'.
Check out our latest analysis for Centrica
The Last 12 Months Of Insider Transactions At Centrica
In the last twelve months, the biggest single purchase by an insider was when Group CEO & Executive Director Iain Conn bought UK£123k worth of shares at a price of UK£1.23 per share. That means that an insider was happy to buy shares at above the current price of UK£0.87. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.
Centrica insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Centrica is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Have Centrica Insiders Traded Recently?
There was some insider buying at Centrica over the last quarter. insider Chris O'Shea purchased UK£5.0k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership of Centrica
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Centrica insiders have about 0.06% of the stock, worth approximately UK£3.3m. We consider this fairly low insider ownership.
So What Does This Data Suggest About Centrica Insiders?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Centrica insiders bought more shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Centrica.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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