The recent 15% drop in Big Technologies plc's (LON:BIG) stock could come as a blow to insiders who purchased UK£524k worth of stock at an average buy price of UK£2.80 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth UK£416k, which is not great.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Big Technologies Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CFO, Company Secretary & Executive Director Daren Morris for UK£322k worth of shares, at about UK£2.98 per share. That means that an insider was happy to buy shares at above the current price of UK£2.22. 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. In our view, the price an insider pays for shares is very important. 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 Daren Morris was also the biggest seller.
Over the last year, we can see that insiders have bought 187.20k shares worth UK£524k. But insiders sold 5.00k shares worth UK£14k. Overall, Big Technologies insiders were net buyers during the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Big Technologies Have Bought Stock Recently
At Big Technologies,over the last quarter, we have observed quite a lot more insider buying than insider selling. CFO, Company Secretary & Executive Director Daren Morris spent UK£87k on stock. But CFO, Company Secretary & Executive Director Daren Morris sold shares worth UK£14k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Does Big Technologies Boast High Insider Ownership?
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. Big Technologies insiders own about UK£182m worth of shares (which is 28% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Big Technologies Tell Us?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Big Technologies. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Big Technologies has 1 warning sign we think you should be aware of.
But note: Big Technologies 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.