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 before you buy or sell Pacific Booker Minerals Inc. (CVE:BKM), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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, 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 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'.
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Pacific Booker Minerals Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the President, John Plourde, sold CA$107k worth of shares at a price of CA$4.01 per share. That means that an insider was selling shares at around the current price of CA$3.59. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
All up, insiders sold more shares in Pacific Booker Minerals than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Pacific Booker Minerals better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Pacific Booker Minerals Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Pacific Booker Minerals shares. In total, insiders dumped CA$337k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Our data indicates that Pacific Booker Minerals insiders own about CA$4.0m worth of shares (which is 6.8% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Do The Pacific Booker Minerals Insider Transactions Indicate?
Insiders sold Pacific Booker Minerals shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. When you consider that most companies have higher levels of insider ownership, we're a little wary. We'd certainly think twice before buying! Along with insider transactions, I recommend checking if Pacific Booker Minerals is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: Pacific Booker Minerals 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.
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