It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Hiscox Ltd’s (LON:HSX) case, it’s fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Hiscox Insider Transactions Over The Last Year
The Group Chief Underwriting Officer & Executive Director Joanne Musselle made the biggest insider purchase in the last 12 months. That single transaction was for UK£150k worth of shares at a price of UK£7.93 each. Even though the purchase was made at a significantly lower price than the recent price (UK£11.12), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
While Hiscox insiders bought shares during the last year, they didn’t sell. You can see the insider transactions (by companies and 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!
Hiscox is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Hiscox Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Hiscox. We can see that Group CEO & Executive Director Hamayou Hussain paid UK£100k for shares in the company. No-one sold. That shows some optimism about the company’s future.
Does Hiscox Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 1.3% of Hiscox shares, worth about UK£51m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Hiscox Tell Us?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Hiscox shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Hiscox. You’d be interested to know, that we found 1 warning sign for Hiscox and we suggest you have a look.
Of course Hiscox may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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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.
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