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 we’ll take a look at whether insiders have been buying or selling shares in Precinct Properties New Zealand Limited (NZSE:PCT).
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 in the company. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
Precinct Properties New Zealand Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chief Executive Officer, Scott Pritchard, sold NZ$740k worth of shares at a price of NZ$1.88 per share. That means that an insider was selling shares at around the current price of NZ$1.69. While we don’t usually like to see insider selling, it’s more concerning if the sales take place 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). Notably Scott Pritchard was also the biggest buyer, having purchased NZ$1.3m worth of shares.
Happily, we note that in the last year insiders paid NZ$1.3m for 702.83k shares. But they sold 655208 shares for NZ$1.2m. In total, Precinct Properties New Zealand insiders bought more than they sold over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Precinct Properties New Zealand is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own NZ$6.8m worth of Precinct Properties New Zealand stock, about 0.3% of the company. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Precinct Properties New Zealand Tell Us?
The fact that there have been no Precinct Properties New Zealand insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Precinct Properties New Zealand insiders are doubting the company. 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. Be aware that Precinct Properties New Zealand is showing 3 warning signs in our investment analysis, and 2 of those are concerning…
But note: Precinct Properties New Zealand 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.
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.
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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. Thank you for reading.