Insider Buyers Lose Additional UK£18k As Switch Metals Dips To UK£8.5m
Insiders who bought UK£66.0k worth of Switch Metals Plc's (LON:SWT) stock at an average buy price of UK£0.09 over the last year may be disappointed by the recent 22% decrease in the stock. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth UK£47.6k which is not ideal.
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.
The Last 12 Months Of Insider Transactions At Switch Metals
The CFO & Director Andrew Yeo made the biggest insider purchase in the last 12 months. That single transaction was for UK£66k worth of shares at a price of UK£0.09 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.065). 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Andrew Yeo was the only individual insider to buy shares in the last twelve months. Notably Andrew Yeo was also the biggest seller.
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 Switch Metals
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Have Switch Metals Insiders Traded Recently?
In the last three months, CFO & Director Andrew Yeo bought UK£66k. But that was only a smidgen more than the UK£66k worth of sales. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.
Insider Ownership Of Switch Metals
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Our data indicates that Switch Metals insiders own about UK£1.2m worth of shares (which is 14% of the company). We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Switch Metals Tell Us?
We can't make any useful conclusions about recent trading, since insider buying and selling has been balanced. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Switch Metals insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Switch Metals has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
But note: Switch Metals 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 of direct interests only, but not derivative transactions or indirect interests.
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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.