Plus500 Ltd. (LON:PLUS) drops to UK£1.3b and insiders who purchased earlier this year lose another US$78.4

The recent price decline of 5.5% in Plus500 Ltd.'s (LON:PLUS) stock may have disappointed insiders who bought US$50k worth of shares at an average price of US$13.19 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only US$50k.

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.

View our latest analysis for Plus500

Plus500 Insider Transactions Over The Last Year

Notably, that recent purchase by Daniel King is the biggest insider purchase of Plus500 shares that we've seen in the last year. That means that even when the share price was higher than UK£13.17 (the recent price), an insider wanted to purchase shares. 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. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Daniel King was the only individual insider to buy during the last year.

The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Plus500

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.3% of Plus500 shares, worth about UK£4.0m, according to our data. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At Plus500 Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Plus500 stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Plus500. Case in point: We've spotted 2 warning signs for Plus500 you should be aware of, and 1 of them makes us a bit uncomfortable.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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