It is not uncommon to see companies perform well in the years after insiders buy shares. 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 PledPharma AB (STO:PLED).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 equally, we would consider it foolish to ignore insider transactions altogether. 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’.
Check out our latest analysis for PledPharma
PledPharma Insider Transactions Over The Last Year
While there weren’t any large insider transactions in the last twelve months, it’s still worth looking at the trading.
PledPharma insiders may have bought shares in the last year, but they didn’t sell any. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
PledPharma is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at PledPharma Have Bought Stock Recently
There was some insider buying at PledPharma over the last quarter. Insiders bought kr205k worth of shares in that time. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Does PledPharma Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that PledPharma insiders own 39% of the company, worth about kr91m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About PledPharma 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. But we don’t feel the same about the fact the company is making losses. Insiders likely see value in PledPharma shares, given these transactions (along with notable insider ownership of the company). 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. In terms of investment risks, we’ve identified 3 warning signs with PledPharma and understanding these should be part of your investment process.
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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.
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