Have Pan African Resources Insiders Been Selling Stock?

We'd be surprised if Pan African Resources PLC (LON:PAF) shareholders haven't noticed that the CEO & Executive Director, Jacobus Albertus Loots, recently sold UK£80k worth of stock at UK£0.27 per share. However, the silver lining is that the sale only reduced their total holding by 3.9%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Pan African Resources

The Last 12 Months Of Insider Transactions At Pan African Resources

Notably, that recent sale by Jacobus Albertus Loots is the biggest insider sale of Pan African Resources shares that we've seen in the last year. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£0.27. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent 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 3.9% of Jacobus Albertus Loots's holding.

In the last twelve months insiders purchased 277.65k shares for UK£44k. But they sold 600.00k shares for UK£158k. Jacobus Albertus Loots divested 600.00k shares over the last 12 months at an average price of US$0.26. The chart below shows insider transactions (by companies and 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!

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Does Pan African Resources Boast High Insider Ownership?

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. From our data, it seems that Pan African Resources insiders own 0.8% of the company, worth about UK£4.3m. We do generally prefer see higher levels of insider ownership.

So What Does This Data Suggest About Pan African Resources Insiders?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, Pan African Resources makes money, and is growing profits. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we'd only buy after very careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for Pan African Resources you should be aware of.

But note: Pan African Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com