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Favorable turn of events for AJ Bell plc (LON:AJB) insiders who've lost UK£207k to date on a UK£1.4m purchase

Insiders who purchased UK£1.4m worth of AJ Bell plc (LON:AJB) shares over the past year recouped some of their losses after price gained 5.6% last week. However, the purchase is proving to be an expensive wager as insiders are yet to get ahead of their losses which currently stand at UK£207k since the time of purchase.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for AJ Bell

AJ Bell Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO, Member of the Management Board & Director Andrew Bell bought UK£995k worth of shares at a price of UK£3.78 per share. That means that an insider was happy to buy shares at above the current price of UK£3.01. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

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In the last twelve months insiders purchased 401.98k shares for UK£1.4m. But insiders sold 16.62k shares worth UK£53k. Overall, AJ Bell insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

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.

Insiders At AJ Bell Have Bought Stock Recently

Over the last quarter, AJ Bell insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought UK£200k worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership Of AJ Bell

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. AJ Bell insiders own about UK£340m worth of shares (which is 27% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The AJ Bell 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. Once you factor in the high insider ownership, it certainly seems like insiders are positive about AJ Bell. Nice! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AJ Bell. While conducting our analysis, we found that AJ Bell has 1 warning sign and it would be unwise to ignore this.

Of course AJ Bell 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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