Trade Alert: The Founder Of Pioneer Credit Limited (ASX:PNC), Keith John, Has Just Spent AU$113k Buying 3.0% More Shares

Even if it's not a huge purchase, we think it was good to see that Keith John, the Founder of Pioneer Credit Limited (ASX:PNC) recently shelled out AU$113k to buy stock, at AU$0.32 per share. However, it only increased their shares held by 3.0%, and it wasn't a huge purchase by absolute value, either.

View our latest analysis for Pioneer Credit

Pioneer Credit Insider Transactions Over The Last Year

In fact, the recent purchase by Founder Keith John was not their only acquisition of Pioneer Credit shares this year. Earlier in the year, they paid AU$0.55 per share in a AU$1.5m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.32). 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. To us, it's very important to consider the price insiders pay for 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.

In the last twelve months Pioneer Credit insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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. We usually like to see fairly high levels of insider ownership. Pioneer Credit insiders own about AU$6.2m worth of shares. That equates to 18% 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.

What Might The Insider Transactions At Pioneer Credit Tell Us?

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Pioneer Credit insiders are well aligned, and that they may think the share price is too low. 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. Our analysis shows 4 warning signs for Pioneer Credit (2 make us uncomfortable!) and we strongly recommend you look at these before investing.

But note: Pioneer Credit 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.