We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Johnson Service Group PLC (LON:JSG).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
View our latest analysis for Johnson Service Group
The Last 12 Months Of Insider Transactions At Johnson Service Group
Over the last year, we can see that the biggest insider purchase was by CEO & Director Peter Egan for UK£55k worth of shares, at about UK£1.15 per share. So it's clear an insider wanted to buy, at around the current price, which is UK£1.15. Of course they may have changed their mind. But this suggests they are optimistic. 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. In this case we're pleased to report that the insider purchases were made at close to current prices.
Johnson Service Group insiders may have bought shares in the last year, but they didn't sell any. 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!
Johnson Service Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Johnson Service Group Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Johnson Service Group. CEO & Director Peter Egan purchased UK£20k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.
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. We usually like to see fairly high levels of insider ownership. Based on our data, Johnson Service Group insiders have about 0.4% of the stock, worth approximately UK£1.8m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Johnson Service Group Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Johnson Service Group insiders bought more shares in the company. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. At Simply Wall St, we found 3 warning signs for Johnson Service Group that deserve your attention before buying any shares.
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.
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. 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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