Insider Spends AU$218k Buying More Shares In Predictive Discovery

Investors who take an interest in Predictive Discovery Limited (ASX:PDI) should definitely note that the Independent Non-Executive Director, Alberto Lavandeira Adan, recently paid AU$0.35 per share to buy AU$218k worth of the stock. We reckon that's a good sign, especially since the purchase boosted their holding by 846%.

View our latest analysis for Predictive Discovery

The Last 12 Months Of Insider Transactions At Predictive Discovery

In fact, the recent purchase by Alberto Lavandeira Adan was the biggest purchase of Predictive Discovery shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of AU$0.37 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. The good news for Predictive Discovery share holders is that insiders were buying at near the current price.

In the last twelve months Predictive Discovery insiders were buying shares, but not selling. Their average price was about AU$0.31. It is certainly positive to see that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. You can see the insider transactions (by companies and 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!

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Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Predictive Discovery insiders own 4.6% of the company, worth about AU$45m. 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 Do The Predictive Discovery Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Predictive Discovery shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Predictive Discovery you should be aware of, and 1 of them is a bit unpleasant.

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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 of direct interests only, but not derivative transactions or indirect interests.

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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.