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Investors who take an interest in Perpetual Resources Limited (ASX:PEC) should definitely note that the Executive Chairman, Julian Babarczy, recently paid AU$0.019 per share to buy AU$461k worth of the stock. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.
The Last 12 Months Of Insider Transactions At Perpetual Resources
Notably, that recent purchase by Julian Babarczy is the biggest insider purchase of Perpetual Resources shares that we've seen in the last year. Even though the purchase was made at a significantly lower price than the recent price (AU$0.049), we still think insider buying is a positive. 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.
Over the last year, we can see that insiders have bought 42.59m shares worth AU$772k. But they sold 1.25m shares for AU$25k. Overall, Perpetual Resources insiders were net buyers during the last year. They paid about AU$0.018 on average. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Perpetual Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Perpetual Resources insiders own 45% of the company, currently worth about AU$10m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About Perpetual Resources Insiders?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Perpetual Resources. That's what I like to see! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Perpetual Resources has 4 warning signs (and 1 which is concerning) we think you should know about.
Of course Perpetual Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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