Having purchased UK£2.4m worth of Pathfinder Minerals Plc (LON:PFP) stock, the recent 11% pullback is not what insiders may have expected

By
Simply Wall St
Published
August 18, 2021
AIM:PFP
Source: Shutterstock

The recent 11% drop in Pathfinder Minerals Plc's (LON:PFP) stock could come as a blow to insiders who purchased UK£2.4m worth of stock at an average buy price of UK£0.17 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only UK£111k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Pathfinder Minerals

Pathfinder Minerals Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO & Director Peter Taylor for UK£2.4m worth of shares, at about UK£0.74 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.0077). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Peter Taylor was the only individual insider to buy during the last year.

Peter Taylor purchased 14.35m shares over the year. The average price per share was UK£0.17. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
AIM:PFP Insider Trading Volume August 19th 2021

Pathfinder Minerals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data indicates that Pathfinder Minerals insiders own about UK£368k worth of shares (which is 11% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Pathfinder Minerals Insiders?

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. The transactions are fine but it'd be more encouraging if Pathfinder Minerals insiders bought more shares in the company. 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, Pathfinder Minerals has 4 warning signs (and 3 which are a bit concerning) we think you should know about.

But note: Pathfinder Minerals 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, but not derivative transactions.

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