We often see insiders buying up shares in companies that perform well over the long term. 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 Perma-Fix Environmental Services, Inc. (NASDAQ:PESI).
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Perma-Fix Environmental Services Insider Transactions Over The Last Year
Notably, that recent purchase by Joe Reeder is the biggest insider purchase of Perma-Fix Environmental Services shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of US$3.99. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Perma-Fix Environmental Services share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 44045 shares worth US$163k. In the last twelve months Perma-Fix Environmental Services insiders were buying shares, but not selling. The chart below shows insider transactions (by 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!
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).
Perma-Fix Environmental Services Insiders Bought Stock Recently
Over the last quarter, Perma-Fix Environmental Services insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$116k worth of shares. That shows some optimism about the company's future.
Does Perma-Fix Environmental Services Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company 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. From our data, it seems that Perma-Fix Environmental Services insiders own 6.7% of the company, worth about US$3.2m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About Perma-Fix Environmental Services Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Perma-Fix Environmental Services insiders are reasonably well aligned, and optimistic for the future. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
But note: Perma-Fix Environmental Services 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.