Independent Non-Executive Chair of THG Picks Up 23% More Stock

Potential THG Plc (LON:THG) shareholders may wish to note that the Independent Non-Executive Chair, Charles Allen, recently bought UK£248k worth of stock, paying UK£0.46 for each share. That's a very decent purchase to our minds and it grew their holding by a solid 23%.

Check out our latest analysis for THG

In fact, the recent purchase by Charles Allen was the biggest purchase of THG shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of UK£0.47 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the THG insiders decided to buy shares at close to current prices.

While THG insiders bought shares during the last year, they didn't sell. Their average price was about UK£0.51. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

THG 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.

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that THG insiders own 31% of the company, worth about UK£219m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest THG insiders are well aligned, and quite possibly think the share price is too low. One for the watchlist, at least! 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. For example - THG has 3 warning signs we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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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