Positive Signs As Multiple Insiders Buy Predictive Discovery Stock

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Predictive Discovery Limited (ASX:PDI), it sends a favourable message to the company's shareholders.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Predictive Discovery Insider Transactions Over The Last Year

The Independent Non-Executive Director Alberto Lavandeira Adan made the biggest insider purchase in the last 12 months. That single transaction was for AU$218k worth of shares at a price of AU$0.35 each. That implies that an insider found the current price of AU$0.38 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.

Predictive Discovery insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Predictive Discovery

Predictive Discovery is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Predictive Discovery Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Predictive Discovery. We can see that Independent Non-Executive Director Alberto Lavandeira Adan paid AU$190k for shares in the company. No-one sold. This makes one think the business has some good points.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Predictive Discovery insiders own about AU$48m worth of shares. That equates to 4.8% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Predictive Discovery Tell Us?

The recent insider purchase is heartening. 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. Given that insiders also own a fair bit of Predictive Discovery we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for Predictive Discovery you should know about.

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 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.