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We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell Burford Capital Limited (LON:BUR), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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'.
Check out our latest analysis for Burford Capital
The Last 12 Months Of Insider Transactions At Burford Capital
In the last twelve months, the biggest single purchase by an insider was when Chief Investment Officer Jonathan Molot bought UK£2.9m worth of shares at a price of UK£8.56 per share. That means that an insider was happy to buy shares at around the current price of UK£9.24. 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 Burford Capital insiders decided to buy shares at close to current prices.
In the last twelve months Burford Capital insiders were buying shares, but not selling. They paid about UK£7.48 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Burford Capital Have Bought Stock Recently
Over the last quarter, Burford Capital insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$2.1m worth of shares. This makes one think the business has some good points.