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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Tatton Asset Management plc (LON:TAM), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Tatton Asset Management
The Last 12 Months Of Insider Transactions At Tatton Asset Management
In the last twelve months, the biggest single purchase by an insider was when CFO & Executive Director Paul Edwards bought UK£71k worth of shares at a price of UK£4.30 per share. That means that an insider was happy to buy shares at around the current price of UK£4.70. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Tatton Asset Management insiders decided to buy shares at close to current prices.
Tatton Asset Management insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around UK£3.85. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Tatton Asset Management Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Tatton Asset Management insiders own about UK£28m worth of shares. That equates to 10% of the company. 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 Tatton Asset Management Insiders?
The fact that there have been no Tatton Asset Management insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Tatton Asset Management and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Tatton Asset Management and understanding this should be part of your investment process.