It is not uncommon to see companies perform well in the years after insiders buy shares. 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 we’ll take a look at whether insiders have been buying or selling shares in Pine Cliff Energy Ltd. (TSE:PNE).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Pine Cliff Energy Insider Transactions Over The Last Year
Robert Disbrow made the biggest insider purchase in the last 12 months. That single transaction was for CA$305k worth of shares at a price of CA$0.30 each. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices. Notably Robert Disbrow was also the biggest seller, having sold CA$474k worth of shares.
In the last twelve months insiders purchased 4.19m shares for CA$1.2m. But insiders sold 1.70m shares worth CA$474k. Overall, Pine Cliff Energy insiders were net buyers last year. The average buy price was around CA$0.28. I’d consider this a positive as it suggests insiders see value at around the current price, which is CA$0.24. The chart below shows insider transactions (by 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!
Pine Cliff Energy 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.
Insiders at Pine Cliff Energy Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Pine Cliff Energy. 2 insiders bought CA$694k worth of shares. But we did see Robert Disbrow sell shares worth CA$448k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of Pine Cliff 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Pine Cliff Energy insiders own about CA$16m worth of shares. That equates to 21% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Pine Cliff Energy Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Pine Cliff Energy shares, given these transactions (along with notable insider ownership of the company). If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Pine Cliff Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.