We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in PICO Holdings, Inc. (NASDAQ:PICO).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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’.
PICO Holdings Insider Transactions Over The Last Year
President Dorothy Timian-Palmer made the biggest insider purchase in the last 12 months. That single transaction was for US$52k worth of shares at a price of US$9.84 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$8.91). 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.
While PICO Holdings insiders bought shares during the last year, they didn’t sell. You can see the insider transactions (by 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!
PICO Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
PICO Holdings Insiders Bought Stock Recently
There was some insider buying at PICO Holdings over the last quarter. Insiders purchased US$48k worth of shares in that period. It’s good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Insider Ownership of PICO Holdings
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, PICO Holdings insiders have about 1.0% of the stock, worth approximately US$1.7m. I generally like to see higher levels of ownership.
So What Do The PICO Holdings Insider Transactions Indicate?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. Overall the buying isn’t worth writing home about. However, our analysis of transactions over the last year is heartening. While we have no worries about the insider transactions, we’d be more comfortable if they owned more PICO Holdings stock. 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. For example – PICO Holdings has 2 warning signs we think you should be aware of.
But note: PICO Holdings 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.