Even if it’s not a huge purchase, we think it was good to see that Jonathan Wenig, the Non-Executive Director of Probiotec Limited (ASX:PBP) recently shelled out AU$90k to buy stock, at AU$1.90 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
See our latest analysis for Probiotec
Probiotec Insider Transactions Over The Last Year
The CEO, MD & Executive Director, Wesley Stringer, made the biggest insider sale in the last 12 months. That single transaction was for AU$3.5m worth of shares at a price of AU$2.03 each. So we know that an insider sold shares at around the present share price of AU$1.85. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Wesley Stringer was the only individual insider to sell over the last year.
Over the last year, we can see that insiders have bought 326.04k shares worth AU$560k. On the other hand they divested 1715000 shares, for AU$3.5m. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Probiotec 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. Probiotec insiders own about AU$45m worth of shares. That equates to 33% 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.
So What Does This Data Suggest About Probiotec Insiders?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. The more recent transactions are a positive, but Probiotec insiders haven’t shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. Overall they seem reasonably aligned. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. In terms of investment risks, we’ve identified 2 warning signs with Probiotec and understanding these should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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