Even if it's not a huge purchase, we think it was good to see that Rupert Harrington, the Independent Non-Executive Director of Pro-Pac Packaging Limited (ASX:PPG) recently shelled out AU$100k to buy stock, at AU$0.20 per share. Although the purchase is not a big one, increasing their shareholding by only 7.5%, it can be interpreted as a good sign.
The Last 12 Months Of Insider Transactions At Pro-Pac Packaging
Notably, that recent purchase by Rupert Harrington is the biggest insider purchase of Pro-Pac Packaging shares that we've seen in the last year. So it's clear an insider wanted to buy, at around the current price, which is AU$0.22. 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. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. In this case we're pleased to report that the insider purchases were made at close to current prices.
While Pro-Pac Packaging insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.16. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below 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!
Pro-Pac Packaging is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Pro-Pac Packaging Boast High 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. Insiders own 4.2% of Pro-Pac Packaging shares, worth about AU$7.5m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Pro-Pac Packaging Tell Us?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Pro-Pac Packaging insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pro-Pac Packaging. When we did our research, we found 3 warning signs for Pro-Pac Packaging (1 doesn't sit too well with us!) that we believe deserve your full attention.
But note: Pro-Pac Packaging 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.
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