August’s proving to be a popular month for insider activity among UK shares. Chairs, CEOs, CFOs and other directors are seemingly going on a shopping spree – some investing over £100,000 into their respective businesses.
In some cases, this capital stems from compensation packages. But in others, directors are using their own money. So which FTSE stocks are being bought by insiders? And how should investors interpret this information?
The biggest buys in August so far
Over the last fortnight, FTSE stocks have been snapped up by insiders and these are the five biggest buys so far.
| Company | Insider | Position | Shares Bought | Value |
| Games Workshop (LSE:GAW) | Kevin Rountree | CEO | 3,654 | £366,900 |
| Senior Plc | Ian King | Chairman | 100,000 | £158,000 |
| Wizz Air Holdings | Jozsef Varadi | CEO | 10,000 | £140,900 |
| Vodafone | Jean-François van Boxmeer | Chairman | 62,867 | £45,264 |
| Domino’s Pizza Group | Ian Bull | Senior Independent Director | 10,000 | £29,400 |
Needless to say, there’s a lot of money pouring in from the C-suite of these businesses. Does that mean investors should follow these leaders and start snapping up shares as well? Let’s zoom into one firm from my portfolio, Games Workshop.
Taking a closer look
As a quick reminder, Games Workshop is the business behind the global tabletop phenomenon – Warhammer. It sells a vast collection of miniatures, paints and books as well as licensing its IP to video games and, more recently, film studios. It’s by far one of the nerdiest companies on the London Stock Exchange. But it’s produced an exceptionally addictive hobby that’s garnered enormous pricing power over the years, growing it into a £3.3bn enterprise.
Now, let’s look closer at the insider activity. CEO Kevin Rountree’s just snapped up another 3,654 shares this month, bringing his total stake to 19,048. While that’s only about 0.06% of the total number of shares outstanding, it’s a position worth just shy of £2m.
Rountree isn’t the only one shopping this month with CFO Rachel Tongue also purchasing 2,426 shares worth £245,710.
How should investors react?
Rountree and Tongue are running the business so obviously know a lot more about what’s going on than shareholders. However, it’s important to highlight these transactions weren’t executed using money from their own pockets. Instead, they’re part of their compensation packages for delivering a record performance.
Personally, I like seeing insiders with skin in the game. When they have their own wealth on the line, it encourages insiders to think more sustainably and long-term, aligning their interests with those of shareholders. But just because insiders are increasing their stake doesn’t automatically make it a terrific investment.
As much as I love this business, there’s no denying that the shares currently trade at a lofty premium. And before putting any more money in, investors need to inspect whether such premiums are worth paying. The same applies to all UK shares being snapped up by insiders right now.
