Pensana Repeat Insider Selling Not A Positive Indicator

Quite a few Pensana Plc (LON:PRE) insiders sold their shares over the past year, which may be a cause for concern. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

Check out our latest analysis for Pensana

Pensana Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Paul Atherley, for UK£251k worth of shares, at about UK£0.18 per share. That means that an insider was selling shares at slightly below the current price (UK£0.20). 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. It is worth noting that this sale was only 22% of Paul Atherley's holding. Notably Paul Atherley was also the biggest buyer, having purchased UK£163k worth of shares.

Happily, we note that in the last year insiders paid UK£163k for 615.50k shares. On the other hand they divested 1.82m shares, for UK£333k. Over the last year we saw more insider selling of Pensana shares, than buying. 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!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Insiders At Pensana Have Bought Stock Recently

There has been significantly more insider buying, than selling, at Pensana, over the last three months. Executive Chairman Paul Atherley spent UK£153k on stock. But we did see Finance Director & Executive Director Robert Kaplan sell shares worth UK£82k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Does Pensana 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 looking at our data, insiders own UK£1.9m worth of Pensana stock, about 3.3% of the company. We prefer to see high levels of insider ownership.

What Might The Insider Transactions At Pensana Tell Us?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The transactions over the last year don't give us confidence, and nor does the fairly low insider ownership, but at least the recent buying is a positive. 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. Be aware that Pensana is showing 5 warning signs in our investment analysis, and 3 of those are a bit unpleasant...

But note: Pensana 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.