Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Spirax-Sarco Engineering plc (LON:SPX), that sends out a positive message to the company's 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.
Spirax-Sarco Engineering Insider Transactions Over The Last Year
The Independent Non-Executive Director Jane Kingston made the biggest insider purchase in the last 12 months. That single transaction was for UK£198k worth of shares at a price of UK£125 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£104). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Spirax-Sarco Engineering insiders bought shares during the last year, they didn't sell. Their average price was about UK£106. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Spirax-Sarco Engineering is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Spirax-Sarco Engineering Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Spirax-Sarco Engineering. Independent Non-Executive Director Olivia Qiu spent UK£93k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
Does Spirax-Sarco Engineering Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 0.1% of Spirax-Sarco Engineering shares, worth about UK£11m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Spirax-Sarco Engineering Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Spirax-Sarco Engineering insiders are well aligned, and that they may think the share price is too low. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Spirax-Sarco Engineering.
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.
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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.
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