As Prophecy International Holdings Limited's (ASX:PRO) market cap increased AU$11m, insiders who bought last year may be reflecting on buying more

Last week, Prophecy International Holdings Limited (ASX:PRO) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a AU$11m increase in the company's market worth. Put another way, the original AU$200k acquisition is now worth AU$437k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Prophecy International Holdings

Prophecy International Holdings Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Edwin Reynolds bought AU$190k worth of shares at a price of AU$0.66 per share. We do like to see buying, but this purchase was made at well below the current price of AU$1.41. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

Edwin Reynolds bought 310.21k shares over the last 12 months at an average price of AU$0.65. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Insider Ownership of Prophecy International Holdings

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Prophecy International Holdings insiders own 26% of the company, worth about AU$27m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Prophecy International Holdings Insider Transactions Indicate?

The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in Prophecy International Holdings 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. At Simply Wall St, we've found that Prophecy International Holdings has 4 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

Of course Prophecy International Holdings 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, 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.