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 Software Circle plc (LON:SFT), that sends out a positive message to the company’s shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
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In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Matthias Riechert bought UK£142k worth of shares at a price of UK£0.30 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.27). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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.
Over the last year, we can see that insiders have bought 905.54k shares worth UK£244k. But they sold 326.20k shares for UK£75k. Overall, Software Circle insiders were net buyers during the last year. Their average price was about UK£0.27. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
See our latest analysis for Software Circle
Software Circle is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 7.2% of Software Circle shares, worth about UK£7.4m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Software Circle insiders are doubting the company. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
