With Pennant International Group Up 12%, Insider Buyers Count Their Returns

Last week, Pennant International Group plc (LON:PEN) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 12% last week, resulting in a UK£1.3m increase in the company's market worth, implying a 14% gain on their initial purchase. Put another way, the original UK£110.2k acquisition is now worth UK£126.1k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Pennant International Group

The Last 12 Months Of Insider Transactions At Pennant International Group

Over the last year, we can see that the biggest insider purchase was by Independent Non-Executive Chairman Ian Dighe for UK£50k worth of shares, at about UK£0.25 per share. We do like to see buying, but this purchase was made at well below the current price of UK£0.28. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 442.50k shares for UK£110k. But they sold 400.00k shares for UK£100k. Overall, Pennant International Group insiders were net buyers during the last year. 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Pennant International Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Pennant International Group insiders own about UK£4.1m worth of shares. That equates to 34% 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 Pennant International Group Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Pennant International Group and their transactions don't cause us concern. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Pennant International Group. While conducting our analysis, we found that Pennant International Group has 2 warning signs and it would be unwise to ignore these.

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.