Pembina Pipeline Insiders Sold CA$5.1m Of Shares Suggesting Hesitancy

Over the past year, many Pembina Pipeline Corporation (TSE:PPL) insiders sold a significant stake in the company which may have piqued investors' interest. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, shareholders should take a deeper look if several insiders are selling stock over a specific time period.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Pembina Pipeline

The Last 12 Months Of Insider Transactions At Pembina Pipeline

The President, J. Burrows, made the biggest insider sale in the last 12 months. That single transaction was for CA$3.4m worth of shares at a price of CA$50.57 each. So it's clear an insider wanted to take some cash off the table, even below the current price of CA$55.75. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 59% of J. Burrows's stake.

In the last twelve months insiders purchased 14.80k shares for CA$751k. But insiders sold 101.11k shares worth CA$5.1m. Over the last year we saw more insider selling of Pembina Pipeline shares, than buying. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Pembina Pipeline Have Bought Stock Recently

It's good to see that Pembina Pipeline insiders have made notable investments in the company's shares. Specifically, Senior VP & COO Jaret Sprott bought CA$270k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Insider Ownership Of Pembina Pipeline

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.09% of Pembina Pipeline shares, worth about CA$28m. 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?

It is good to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. We don't take much heart from transactions by Pembina Pipeline insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. In short they are likely aligned with shareholders. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. To assist with this, we've discovered 3 warning signs that you should run your eye over to get a better picture of Pembina Pipeline.

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 of direct interests only, but not derivative transactions or indirect interests.

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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.