Whilst it may not be a huge deal, we thought it was good to see that the Card Factory plc (LON:CARD) CEO & Executive Director, Darcy Willson-Rymer, recently bought UK£40k worth of stock, for UK£0.70 per share. Although the purchase is not a big one, increasing their shareholding by only 6.3%, it can be interpreted as a good sign.
Notably, that recent purchase by CEO & Executive Director Darcy Willson-Rymer was not the only time they bought Card Factory shares this year. They previously made an even bigger purchase of UK£50k worth of shares at a price of UK£0.95 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.70). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices because that suggests they viewed the stock as good value even at a higher price.
In the last twelve months Card Factory insiders were buying shares, but not selling. They paid about UK£0.83 on average. These transactions suggest that insiders have considered the current price attractive.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Card Factory insiders own 8.5% of the company, worth about UK£21m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in Card Factory shares, given these transactions (along with notable insider ownership of the company). While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision.