We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell PrairieSky Royalty Ltd. (TSE:PSK), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia 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’.
PrairieSky Royalty Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when President Andrew Phillips bought CA$179k worth of shares at a price of CA$23.92 per share. So it’s clear an insider wanted to buy, even at a higher price. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. That purchase may suggest an expectation of positive returns over the long term. Notably Andrew Phillips was also the biggest seller, having sold CA$20k worth of shares.
Over the last year, we can see that insiders have bought 42.78k shares worth CA$1.1m. On the other hand they divested 1.00k shares, for CA$20k. In the last twelve months there was more buying than selling by PrairieSky Royalty insiders. They paid about CA$25.07 on average. These transactions suggest that insiders have considered the current price of CA$18.28 attractive. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at PrairieSky Royalty Have Bought Stock Recently
There has been significantly more insider buying, than selling, at PrairieSky Royalty, over the last three months. We can see that Andrew Phillips paid CA$95k for shares in the company. But Andrew Phillips sold shares worth CA$20k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does PrairieSky Royalty Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. PrairieSky Royalty insiders own about CA$45m worth of shares. That equates to 1.1% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At PrairieSky Royalty Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of PrairieSky Royalty we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for PrairieSky Royalty.
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.
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 firstname.lastname@example.org. 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.