Insiders who bought Avon Protection plc (LON:AVON) stock in the last 12 months were richly rewarded last week. The company's market value increased by UK£39m as a result of the stock's 15% gain over the same period. As a result, the stock they originally bought for US$76k is now worth US$78k.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At Avon Protection
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Bruce Thompson bought UK£50k worth of shares at a price of UK£10.09 per share. That implies that an insider found the current price of UK£10.20 per share to be enticing. 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 do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Avon Protection insiders decided to buy shares at close to current prices.
In the last twelve months Avon Protection insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Avon Protection is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership Of Avon Protection
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. We usually like to see fairly high levels of insider ownership. Based on our data, Avon Protection insiders have about 0.4% of the stock, worth approximately UK£1.1m. I generally like to see higher levels of ownership.
So What Do The Avon Protection Insider Transactions Indicate?
The fact that there have been no Avon Protection insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Avon Protection insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 2 warning signs with Avon Protection and understanding them should be part of your investment process.
But note: Avon Protection 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, but not derivative transactions.
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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.
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