While Pensana Plc (LON:PRE) shareholders have had a good week with the stock up 64%, insiders can't say the same having sold stock over the past year. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.
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 Pensana
The Last 12 Months Of Insider Transactions At Pensana
In the last twelve months, the biggest single sale by an insider was when the Executive Chairman, Paul Atherley, sold UK£251k worth of shares at a price of UK£0.18 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£0.25. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. This single sale was just 22% of Paul Atherley's stake. Paul Atherley was the only individual insider to sell over the last year.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.
Pensana Insiders Are Selling The Stock
The last three months saw significant insider selling at Pensana. In total, Executive Chairman Paul Atherley sold UK£251k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Pensana insiders own 3.7% of the company, worth about UK£2.6m. We prefer to see high levels of insider ownership.
So What Do The Pensana Insider Transactions Indicate?
An insider sold Pensana shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. When you consider that most companies have higher levels of insider ownership, we're a little wary. So we're not rushing to buy, to say the least. While it's good to be aware of 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. To help with this, we've discovered 6 warning signs (3 are potentially serious!) that you ought to be aware of before buying any shares in Pensana.
Of course Pensana may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
About LSE:PRE
Pensana
Engages in the exploration and development of mineral properties in Angola.
Medium-low with adequate balance sheet.
