Insider Traders Lose UK£59k As Future Drops

The recent 10% drop in Future plc's (LON:FUTR) stock could come as a blow to insiders who purchased UK£120.9k worth of stock at an average buy price of UK£5.50 over the past 12 months. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth UK£62.2k which is not ideal.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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The Last 12 Months Of Insider Transactions At Future

Over the last year, we can see that the biggest insider purchase was by CEO & Director Chin Li Ying for UK£50k worth of shares, at about UK£5.51 per share. That means that an insider was happy to buy shares at above the current price of UK£2.83. 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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Chin Li Ying was also the biggest seller.

Over the last year, we can see that insiders have bought 21.97k shares worth UK£121k. But they sold 14.28k shares for UK£63k. In total, Future insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for Future

Future is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership Of Future

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. From what we can see in our data, insiders own only about UK£240k worth of Future shares. We might be missing something but that seems like very low insider ownership.

What Might The Insider Transactions At Future Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Future insiders are doubting the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 2 warning signs for Future that deserve your attention before buying any shares.

Of course Future 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 of direct interests only, but not derivative transactions or indirect interests.

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