29 December 2020 12:44
It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Legal & General Group Plc (). Do Insider Transactions Matter? It's quite normal to see company insiders, such as board members, trading in company stock, from time to time.
However, such insiders must disclose their trading activities, and not trade on inside information. We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University found that 'insider purchases earn abnormal returns of more than 6% per year'. Legal & General Group Insider Transactions Over The Last Year The Independent Non-Executive Director Philip John Broadley made the biggest insider purchase in the last 12 months. That single transaction was for UK£75k worth of shares at a price of UK£1.80 each. We do like to see buying, but this purchase was made at well below the current price of UK£2.66. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive. In the last twelve months Legal & General Group insiders were buying shares, but not selling. Their average price was about UK£2.00. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date! LSE:LGEN Insider Trading Volume December 29th 2020 Legal & General Group is not the only stock insiders are buying. So take a peek at this free Legal & General Group Insiders Bought Stock Recently We saw some Legal & General Group insider buying shares in the last three months. Insiders purchased UK£35k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor. Does Legal & General Group Boast High Insider Ownership? For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It appears that Legal & General Group insiders own 0.08% of the company, worth about UK£12m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment. So What Does This Data Suggest About Legal & General Group Insiders? Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Legal & General Group and their transactions don't cause us concern. 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. To assist with this, we've discovered that you should run your eye over to get a better picture of Legal & General Group. If you would prefer to check out another company--one with potentially superior financials--then do not miss this free 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. Promoted If you're looking to trade Legal & General Group, open an account with the lowest-cost* platform trusted by professionals,. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. 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. *Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020 Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team (at) simplywallst.com.