Insiders who bought Gooch & Housego PLC (LON:GHH) stock in the last 12 months were richly rewarded last week. The company’s market value increased by UK£15m as a result of the stock’s 11% gain over the same period. As a result, the stock they originally bought for UK£189k is now worth UK£216k.
Although we don’t think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Gooch & Housego
Gooch & Housego Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Gary Bullard bought UK£61k worth of shares at a price of UK£4.05 per share. Even though the purchase was made at a significantly lower price than the recent price (UK£5.74), 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.
While Gooch & Housego insiders bought shares during the last year, they didn’t sell. Their average price was about UK£5.03. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today’s share price. 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!
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).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Our data isn’t picking up on much insider ownership at Gooch & Housego, though insiders do hold about UK£290k worth of shares. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. This level of insider ownership is notably low, and not very encouraging.
So What Does This Data Suggest About Gooch & Housego Insiders?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we’d be more comfortable if they owned more Gooch & Housego stock. So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. In terms of investment risks, we’ve identified 1 warning sign with Gooch & Housego and understanding this should be part of your investment process.
But note: Gooch & Housego 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.
