We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Perseus Mining Limited (ASX:PRU).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
The Last 12 Months Of Insider Transactions At Perseus Mining
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Sally-Anne Layman bought AU$71k worth of shares at a price of AU$0.34 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.45. 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.
Happily, we note that in the last year insiders paid AU$134k for 370k shares. On the other hand they divested 160k shares, for AU$58k. Overall, Perseus Mining insiders were net buyers last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. 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).
Have Perseus Mining Insiders Traded Recently?
In the last quarter we saw Non-Executive Chairman Terence Harvey spend AU$62k on shares. However that only slightly eclipses the sales, AU$58k worth of sales. Looking at the net result, we don't think these recent trades shed much light on how insiders, as a group, are feeling about the company's prospects.
Insider Ownership of Perseus Mining
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Perseus Mining insiders own about AU$9.7m worth of shares (which is 2.0% of the company). Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About Perseus Mining Insiders?
Insider sales and purchases have netted out over the last three months, so it's hard to draw any conclusion from recent trading. On a brighter note, the transactions over the last year are encouraging. The transactions are fine but it'd be more encouraging if Perseus Mining insiders bought more shares in the company. Of course, the future is what matters most. So if you are interested in Perseus Mining, you should check out this free report on analyst forecasts for the company.
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.