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 before you buy or sell Walker Crips Group plc (LON:WCW), you may well want to know whether insiders have been buying or selling.

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Walker Crips Group

The Last 12 Months Of Insider Transactions At Walker Crips Group

In fact, the recent purchase by Non-Executive Director Hua Lim was not their only acquisition of Walker Crips Group shares this year. Earlier in the year, they paid UK£0.26 per share in a UK£79k purchase. So it's clear an insider wanted to buy, at around the current price, which is UK£0.27. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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 Walker Crips Group insider decided to buy shares at close to current prices. Hua Lim was the only individual insider to buy during the last year.

Hua Lim purchased 601.49k shares over the year. The average price per share was UK£0.26. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

Walker Crips Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of Walker Crips Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Walker Crips Group insiders own 31% of the company, worth about UK£3.5m. 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 Walker Crips Group Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Walker Crips Group insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Walker Crips Group. At Simply Wall St, we've found that Walker Crips Group has 2 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.

But note: Walker Crips Group 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.

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