Insiders who purchased PepinNini Minerals Limited (ASX:PNN) shares in the past 12 months are unlikely to be deeply impacted by the stock's 13% decline over the past week. Even after accounting for the recent loss, the AU$744k worth of stock purchased by them is now worth AU$989k or in other words, their investment continues to give good returns.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for PepinNini Minerals
PepinNini Minerals Insider Transactions Over The Last Year
The insider Peter Proksa made the biggest insider purchase in the last 12 months. That single transaction was for AU$506k worth of shares at a price of AU$0.54 each. That means that even when the share price was higher than AU$0.38 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid AU$744k for 2.60m shares. But they sold 128.50k shares for AU$57k. In the last twelve months there was more buying than selling by PepinNini Minerals insiders. Their average price was about AU$0.29. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
PepinNini Minerals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does PepinNini Minerals Boast High Insider Ownership?
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. PepinNini Minerals insiders own about AU$5.8m worth of shares. That equates to 34% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At PepinNini Minerals Tell Us?
It doesn't really mean much that no insider has traded PepinNini Minerals shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think PepinNini Minerals insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 4 warning signs for PepinNini Minerals (of which 2 don't sit too well with us!) you should know about.
Of course PepinNini Minerals 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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