Whilst it may not be a huge deal, we thought it was good to see that the Persimmon Plc (LON:PSN) Group Chief Executive & Director, Dean Finch, recently bought UK£50k worth of stock, for UK£27.18 per share. That purchase might not be huge but it did increase their holding by 28%.
Persimmon Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, David Jenkinson, sold UK£3.4m worth of shares at a price of UK£26.86 per share. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of UK£27.15. 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. We note that the biggest single sale was only 18% of David Jenkinson's holding. David Jenkinson was the only individual insider to sell shares in the last twelve months.
David Jenkinson sold a total of 179.31k shares over the year at an average price of UK£26.49. 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 are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does Persimmon Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. It appears that Persimmon insiders own 0.6% of the company, worth about UK£53m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Persimmon Tell Us?
It is good to see the recent insider purchase. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by Persimmon insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. Overall they seem reasonably aligned. While we like knowing 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. For example - Persimmon has 1 warning sign we think you should be aware of.
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.
When trading Persimmon or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.