Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of PayPoint plc (LON:PAY), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for PayPoint

The Last 12 Months Of Insider Transactions At PayPoint

The CEO, Member of Executive Board & Executive Director Nicholas Wiles made the biggest insider purchase in the last 12 months. That single transaction was for UK￡232k worth of shares at a price of UK￡4.64 each. Even though the purchase was made at a significantly lower price than the recent price (UK￡7.08), 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.

Happily, we note that in the last year insiders paid UK￡252k for 53.06k shares. But insiders sold 13.90k shares worth UK￡93k. In the last twelve months there was more buying than selling by PayPoint insiders. 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!

PayPoint 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.

PayPoint Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at PayPoint. We note insiders cashed in UK￡93k worth of shares. On the flip side, MD of Card Services & Member of Executive Board Mark Latham spent UK￡20k on purchasing shares. Generally this level of net selling might be considered a bit bearish.

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. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own UK￡2.4m worth of PayPoint stock, about 0.5% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. We consider this fairly low insider ownership.