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Bullish insiders bet US$36m on Preformed Line Products Company (NASDAQ:PLPC)

·3 min read

Quite a few insiders have dramatically grown their holdings in Preformed Line Products Company (NASDAQ:PLPC) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Preformed Line Products

Preformed Line Products Insider Transactions Over The Last Year

Notably, that recent purchase by Katherine Wensink is the biggest insider purchase of Preformed Line Products shares that we've seen in the last year. Even though the purchase was made at a significantly lower price than the recent price (US$76.34), 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.

Over the last year, we can see that insiders have bought 810.49k shares worth US$36m. On the other hand they divested 810.40k shares, for US$36m. In the last twelve months there was more buying than selling by Preformed Line Products insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
insider-trading-volume

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).

Are Preformed Line Products Insiders Buying Or Selling?

In the last three months, insiders bought US$36m. However that only slightly eclipses the sales, US$36m worth of sales. So it is hard to draw any conclusion about how insiders are feeling about the stock, from these recent trades.

Insider Ownership

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. 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 appears that Preformed Line Products insiders own 11% of the company, worth about US$42m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About Preformed Line Products Insiders?

Insider purchases may have been minimal, in the last three months, but there was no selling at all. That said, the purchases were not large. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Preformed Line Products insiders are doubting the company, and they do own shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for Preformed Line Products that deserve your attention before buying any shares.

But note: Preformed Line Products may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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