Have Insiders Been Buying Checkit plc (LON:CKT) Shares?
Want to participate in a short research study? Help shape the future of investing tools and earn a $40 gift card!
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Checkit plc (LON:CKT).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
Check out our latest analysis for Checkit
Checkit Insider Transactions Over The Last Year
The Executive Chairman Keith Daley made the biggest insider purchase in the last 12 months. That single transaction was for UK£900k worth of shares at a price of UK£0.36 each. That means that an insider was happy to buy shares at around the current price of UK£0.41. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Checkit insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 5.45m shares worth UK£1.8m. But they sold 43.41k shares for UK£18k. Overall, Checkit insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Checkit is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Are Checkit Insiders Buying Or Selling?
Non-Executive Director Rachel Neaman bought just UK£958 worth of shares in that time. That's not much at all. Overall, we don't think these recent trades are particularly informative, one way or the other.
Does Checkit Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 24% of Checkit shares, worth about UK£5.7m. 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 Checkit Insiders?
We note a that there has been a bit of insider buying recently (but no selling). 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 Checkit and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Checkit. For instance, we've identified 3 warning signs for Checkit (1 is concerning) you should be aware of.
But note: Checkit 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
