Who Has Been Buying Pacific Nickel Mines Limited (ASX:PNM) Shares?
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Pacific Nickel Mines Limited (ASX:PNM).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
View our latest analysis for Pacific Nickel Mines
The Last 12 Months Of Insider Transactions At Pacific Nickel Mines
The Non-Executive Director James Dean made the biggest insider purchase in the last 12 months. That single transaction was for AU$280k worth of shares at a price of AU$0.05 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.047). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Pacific Nickel Mines insiders bought shares during the last year, they didn't sell. 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!
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).
Pacific Nickel Mines Insiders Bought Stock Recently
It's good to see that Pacific Nickel Mines insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$455k worth of shares. This makes one think the business has some good points.
Insider Ownership of Pacific Nickel Mines
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. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Pacific Nickel Mines insiders own 31% of the company, worth about AU$3.0m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Pacific Nickel Mines Insider Transactions Indicate?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Pacific Nickel Mines we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pacific Nickel Mines. For instance, we've identified 6 warning signs for Pacific Nickel Mines (5 are a bit concerning) you should be aware of.
But note: Pacific Nickel Mines 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.
This article by Simply Wall St is general in nature. 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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