A number of insiders bought The Restaurant Group plc (LON:RTN) stock last year, which is great news for shareholders

Simply Wall St
·3 min read

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in The Restaurant Group plc's (LON:RTN) case, it's fantastic news for shareholders.

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.

Check out our latest analysis for Restaurant Group

Restaurant Group Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Director Andy Hornby bought UK£159k worth of shares at a price of UK£0.42 per share. That means that even when the share price was higher than UK£0.36 (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. We always take careful note of the price insiders pay when purchasing 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.

While Restaurant Group insiders bought shares during the last year, they didn't sell. They paid about UK£0.48 on average. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From what we can see in our data, insiders own only about UK£641k worth of Restaurant Group shares. This level of insider ownership is notably low, and not very encouraging.

What Might The Insider Transactions At Restaurant Group Tell Us?

It doesn't really mean much that no insider has traded Restaurant Group shares in the last quarter. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Restaurant Group stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Restaurant Group. Case in point: We've spotted 1 warning sign for Restaurant Group you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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