Insider Buying: Jennifer Forrest Just Spent CA$58k On Pembina Pipeline Corporation (TSE:PPL) Shares

By
Simply Wall St
Published
November 28, 2021
TSX:PPL
Source: Shutterstock

Even if it's not a huge purchase, we think it was good to see that Jennifer Forrest, a Pembina Pipeline Corporation (TSE:PPL) insider, recently shelled out CA$58k to buy stock, at CA$38.71 per share. That purchase might not be huge but it did increase their holding by 19%.

See our latest analysis for Pembina Pipeline

Pembina Pipeline Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Interim Chief Financial Officer, Cameron Goldade, for CA$494k worth of shares, at about CA$36.85 per share. That means that an insider was selling shares at slightly below the current price (CA$38.72). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 39% of Cameron Goldade's stake.

Over the last year, we can see that insiders have bought 20.17k shares worth CA$748k. On the other hand they divested 17.15k shares, for CA$645k. In the last twelve months there was more buying than selling by Pembina Pipeline insiders. Their average price was about CA$37.11. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. 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:PPL Insider Trading Volume November 29th 2021

Pembina Pipeline is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Pembina Pipeline 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. It appears that Pembina Pipeline insiders own 0.1% of the company, worth about CA$26m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Pembina Pipeline Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Pembina Pipeline we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pembina Pipeline. Every company has risks, and we've spotted 2 warning signs for Pembina Pipeline (of which 1 makes us a bit uncomfortable!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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