Bullish Pryme Insider Buying Worth €11.7m Yet To Pay Off

Insiders who bought €11.7m worth of Pryme N.V.'s (OB:PRYME) stock at an average buy price of €10.98 over the last year may be disappointed by the recent 13% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth €2.28m, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Pryme

The Last 12 Months Of Insider Transactions At Pryme

The Member of Supervisory Board Boudewijn van Vliet made the biggest insider purchase in the last 12 months. That single transaction was for kr12m worth of shares at a price of kr10.99 each. That means that even when the share price was higher than kr2.15 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Pryme insiders were buying shares, but not selling. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Does Pryme 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 17% of Pryme shares, worth about kr22m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Pryme Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Pryme shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Pryme insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Pryme has 6 warning signs (and 4 which can't be ignored) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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