We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Pinnacle Renewable Holdings Inc (TSE:PL), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, including certain disclosures.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Pinnacle Renewable Holdings
Pinnacle Renewable Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when President Leroy Reitsma sold CA$3.1m worth of shares at a price of CA$15.31 per share. That means that an insider was selling shares at around the current price of CA$12.62. They could have a variety of motivations for selling, but it's still not particularly encouraging to see. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at that price. Leroy Reitsma was the only individual insider to sell shares in the last twelve months. Notably Leroy Reitsma was also the biggest buyer, having purchased CA$600k worth of shares.
In the last twelve months insiders purchased 44.09k shares for CA$600k. But they sold 200.00k for CA$3.1m. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this freelist of companies. (Hint: insiders have been buying them).
Insiders at Pinnacle Renewable Holdings Have Sold Stock Recently
Over the last three months, we've seen notably more insider selling, than insider buying, at Pinnacle Renewable Holdings. In that time, Leroy Reitsma dumped CA$3.1m worth of shares. On the other hand we note insiders bought CA$339k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Does Pinnacle Renewable Holdings Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Pinnacle Renewable Holdings insiders own about CA$13m worth of shares (which is 4.2% of the company). Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Pinnacle Renewable Holdings Insiders?
The stark truth for Pinnacle Renewable Holdings is that there has been more insider selling than insider buying in the last three months. Zooming out, the longer term picture doesn't give us much comfort. When you combine this with the relatively low insider ownership, we are very cautious about the stock. So we're not rushing to buy, to say the least. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this freereport showing analyst forecasts for its future.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
