Are Insiders Buying XLMedia PLC (LON:XLM) Stock?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in XLMedia PLC (LON:XLM).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
View our latest analysis for XLMedia
The Last 12 Months Of Insider Transactions At XLMedia
In the last twelve months, the biggest single purchase by an insider was when Group CEO & Director Stuart Antony Simms bought UK£233k worth of shares at a price of UK£0.26 per share. That means that even when the share price was higher than UK£0.15 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 3.26m shares worth UK£1.5m. But they sold 495372 shares for UK£389k. Overall, XLMedia insiders were net buyers last year. The average buy price was around UK£0.45. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by 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!
XLMedia is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
XLMedia Insiders Bought Stock Recently
Over the last quarter, XLMedia insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought UK£334k worth of shares. That shows some optimism about the company's future.
Insider Ownership of XLMedia
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests XLMedia insiders own 4.7% of the company, worth about UK£1.3m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
So What Do The XLMedia Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that XLMedia insiders are reasonably well aligned, and optimistic for the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 8 warning signs for XLMedia you should be aware of, and 1 of these is significant.
But note: XLMedia 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
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