Trade Alert: The Executive Chairman Of Perpetual Resources Limited (ASX:PEC), Julian Babarczy, Has Just Spent AU$461k Buying A Few More Shares

Potential Perpetual Resources Limited (ASX:PEC) shareholders may wish to note that the Executive Chairman, Julian Babarczy, recently bought AU$461k worth of stock, paying AU$0.019 for each share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

See our latest analysis for Perpetual Resources

Perpetual Resources Insider Transactions Over The Last Year

Notably, that recent purchase by Julian Babarczy is the biggest insider purchase of Perpetual Resources shares that we've seen in the last year. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.049. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Over the last year, we can see that insiders have bought 42.59m shares worth AU$772k. But they sold 1.25m shares for AU$25k. In the last twelve months there was more buying than selling by Perpetual Resources insiders. Their average price was about AU$0.018. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Perpetual Resources Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Perpetual Resources insiders own 45% of the company, worth about AU$10m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Perpetual Resources Insider Transactions Indicate?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Perpetual Resources insiders are well aligned, and quite possibly think the share price is too low. Nice! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To help with this, we've discovered 4 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Perpetual Resources.

But note: Perpetual Resources 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.
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