Have Insiders Been Buying Polymetal International plc (LON:POLY) Shares?

By
Simply Wall St
Published
May 30, 2021
LSE:POLY
Source: Shutterstock

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Polymetal International plc (LON:POLY).

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for Polymetal International

The Last 12 Months Of Insider Transactions At Polymetal International

The Chief Operating Officer, Vitaly Savchenko, made the biggest insider sale in the last 12 months. That single transaction was for UK£150k worth of shares at a price of UK£15.00 each. That means that even when the share price was below the current price of UK£16.97, an insider wanted to cash in some shares. 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 16% of Vitaly Savchenko's holding.

Happily, we note that in the last year insiders paid UK£205k for 12.80k shares. But they sold 11.70k shares for UK£183k. Overall, Polymetal International 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!

insider-trading-volume
LSE:POLY Insider Trading Volume May 31st 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Polymetal International Insiders Bought Stock Recently

It's good to see that Polymetal International insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought UK£58k worth of shares. This could be interpreted as suggesting a positive outlook.

Does Polymetal International Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Polymetal International insiders own 11% of the company, currently worth about UK£865m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Polymetal International Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Polymetal International insiders are well aligned, and quite possibly think the share price is too low. That's what I like to see! 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 Polymetal International you should be aware of.

But note: Polymetal International 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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