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 before you buy or sell PCM, Inc. (NASDAQ:PCMI), you may well want to know whether insiders have been buying or selling.
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 on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
The Last 12 Months Of Insider Transactions At PCM
Over the last year, we can see that the biggest insider sale was by Independent Director Thomas Maloof for US$240k worth of shares, at about US$24.45 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$33.60. While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 13.2% of Thomas Maloof’s stake. Thomas Maloof was the only individual insider to sell shares in the last twelve months.
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!
I will like PCM better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does PCM Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that PCM insiders own 28% of the company, worth about US$115m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At PCM Tell Us?
It doesn’t really mean much that no insider has traded PCM shares in the last quarter. While we feel good about high insider ownership of PCM, we can’t say the same about the selling of shares. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for PCM.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.