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Company management and large investors tend to have unparalleled views into the operations of their own company compared to a typical individual investor. When these insiders buy, their stock tends to outperform the market afterwards (The MIT Press, 1998). This is because their access to information aids them in more informed decision-making. However, its certainly not enough to base your investment decision based on insider transactions, but these events do warrant a deeper dive into the stocks.
Lancashire Holdings Limited (LSE:LRE)
Lancashire Holdings Limited provides specialty insurance and reinsurance products worldwide. Lancashire Holdings was formed in 2005 and has a market cap of GBP £1.22B, putting it in the small-cap group.
Lancashire Holdings Limited’s (LSE:LRE) insiders have invested 76,409 shares in the large-cap stocks within the past three months. In total, individual insiders own over 11 million shares in the business, which makes up around 5.33% of total shares outstanding.
Insiders that have recently ramped up their holdings are: Alexander Maloney (board member) . , Elaine Whelan (board member) . , Michael Dawson (management and board member) . , Peter Clarke (management and board member) . and Samantha Hoe-Richardson (board member) .
With a notable expected earnings growth rate of 16.69% per year for the next five years, the current bullish sentiment around the company’s outlook may be a key driver for insiders to rally behind their own stock if they believe this growth potential has not yet been properly factored into the share price. Interested in Lancashire Holdings? Find out more here.
Countrywide plc (LSE:CWD)
Countrywide plc, together with its subsidiaries, provides residential estate agency and property services in the United Kingdom. Established in 1986, and run by CEO Ezra Nahome, the company currently employs 10,677 people and with the market cap of GBP £269.65M, it falls under the small-cap category.
Countrywide plc’s (LSE:CWD) insiders have invested 400,000 shares in the small-cap stocks within the past three months. In total, individual insiders own over 2 million shares in the business, which makes up around 0.65% of total shares outstanding.
Insiders that have recently ramped up their holdings are: Himanshu Raja (management and board member) . , Paul Creffield (management) . and Peter James Long (management and board member) .
Analysts anticipate a relatively flat top-line growth year-on-year over the next couple of years. However, earnings are predicted to grow at an impressive rate of 120.58% in the upcoming year, from today’s level, which could indicate the company’s cost controls will show meaningful results, offsetting the slow revenue growth. Insiders may have confidence in these cost initiatives, or believe the market has overly penalized the company’s shares, leading to an opportune time to buy. Dig deeper into Countrywide here.