Peako Reaches AU$7.4m Market Cap Benefiting Insider Stock Buying

Last week, Peako Limited (ASX:PKO) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 25% last week, resulting in a AU$1.5m increase in the company's market worth, implying a 41% gain on their initial purchase. In other words, the original AU$330.8k purchase is now worth AU$467.6k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Peako

In the last twelve months, the biggest single purchase by an insider was when insider Andrew Wilson bought AU$205k worth of shares at a price of AU$0.003 per share. We do like to see buying, but this purchase was made at well below the current price of AU$0.005. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Happily, we note that in the last year insiders paid AU$331k for 93.51m shares. But they sold 25.18m shares for AU$126k. In the last twelve months there was more buying than selling by Peako insiders. Their average price was about AU$0.0035. To my mind it is good that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Check out our latest analysis for Peako

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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 appears that Peako insiders own 20% of the company, worth about AU$1.5m. 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 Peako Tell Us?

It doesn't really mean much that no insider has traded Peako shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Peako insiders are doubting the company, and they do own shares. 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. Every company has risks, and we've spotted 5 warning signs for Peako you should know about.

Of course Peako may not be the best stock to buy. So you may wish to see this free collection of high quality 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.