Despite Pacific Edge's Pullback, Insiders Still Gained NZ$276k
Insiders who bought Pacific Edge Limited (NZSE:PEB) in the last 12 months may probably not pay attention to the stock's recent 11% drop. After taking the recent loss into consideration, the NZ$586.6k worth of stock they bought is now worth NZ$862.6k, indicating that their investment yielded a positive return.
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.
Pacific Edge Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Chairman Simon Flood bought NZ$500k worth of shares at a price of NZ$0.17 per share. Even though the purchase was made at a significantly lower price than the recent price (NZ$0.25), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months Pacific Edge insiders were buying shares, but not selling. You can see the insider transactions (by companies and 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!
Check out our latest analysis for Pacific Edge
Pacific Edge is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Pacific Edge 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Pacific Edge insiders own 13% of the company, worth about NZ$41m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Pacific Edge Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Pacific Edge shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think Pacific Edge insiders are doubting the company, and they do own shares. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Pacific Edge.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.