We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Pingtan Marine Enterprise Ltd. (NASDAQ:PME).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
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Pingtan Marine Enterprise Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Xinrong Zhuo bought US$304k worth of shares at a price of US$3.06 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$2.18). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We always take careful note of the price insiders pay when purchasing 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. Xinrong Zhuo was the only individual insider to buy shares in the last twelve months.
Xinrong Zhuo purchased 730k shares over the year. The average price per share was US$3.22. You can see a visual depiction of insider transactions (by 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!
Pingtan Marine Enterprise is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Pingtan Marine Enterprise 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. It’s great to see that Pingtan Marine Enterprise insiders own 57% of the company, worth about US$99m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Pingtan Marine Enterprise Insider Transactions Indicate?
The fact that there have been no Pingtan Marine Enterprise insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Pingtan Marine Enterprise insiders think the business has merit. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.