We often see insiders buying up shares in companies that perform well over the long term. 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 shareholders might well want to know whether insiders have been buying or selling shares in PS&C Limited (ASX:PSZ).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At PS&C
CEO, MD & Director Glenn Fielding made the biggest insider purchase in the last 12 months. That single transaction was for AU$500k worth of shares at a price of AU$0.20 each. So it’s clear an insider wanted to buy, even at a higher price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. That purchase may suggest an expectation of positive returns over the long term. Glenn Fielding was the only individual insider to buy shares in the last twelve months.
Glenn Fielding bought a total of 2.51m shares over the year at an average price of AU$0.20. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
PS&C is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that PS&C insiders own 23% of the company, worth about AU$7.6m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The PS&C Insider Transactions Indicate?
Insider purchases have outweighed sales, in the last three months. But the difference isn’t much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in PS&C and we see no evidence to suggest they are worried about the future. Along with insider transactions, I recommend checking if PS&C is growing revenue. This free chart of historic revenue and earnings should make that easy.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.