Pieridae Energy Limited (TSE:PEA) insiders who sold earlier this year missed the bus as stock gained 20% last week

By
Simply Wall St
Published
January 18, 2022
TSX:PEA
Source: Shutterstock

While it’s been a great week for Pieridae Energy Limited (TSE:PEA) shareholders after stock gained 20%, not so much for insiders who sold stock over the past year. The value of their investment would have been higher had they waited to sell their stock.

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.

Check out our latest analysis for Pieridae Energy

The Last 12 Months Of Insider Transactions At Pieridae Energy

Over the last year, we can see that the biggest insider sale was by the General Counsel & Corporate Secretary, Thomas Ciz, for CA$206k worth of shares, at about CA$0.34 per share. That means that even when the share price was below the current price of CA$0.45, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 77% of Thomas Ciz's holding. The only individual insider seller over the last year was Thomas Ciz.

Happily, we note that in the last year insiders paid CA$54k for 116.25k shares. But they sold 778.28k shares for CA$268k. Thomas Ciz divested 778.28k shares over the last 12 months at an average price of CA$0.34. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
TSX:PEA Insider Trading Volume January 18th 2022

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Pieridae Energy

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Our data indicates that Pieridae Energy insiders own about CA$8.9m worth of shares (which is 13% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. We do generally prefer see higher levels of insider ownership.

So What Do The Pieridae Energy Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. We don't take much encouragement from the transactions by Pieridae Energy insiders. And we're not picking up on high enough insider ownership to give us any comfort. 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 Pieridae Energy (of which 2 are concerning!) 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, but not derivative transactions.

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