Pick n Pay Stores Insiders Placed Bullish Bets Worth R31.6m

Over the last year, a good number of insiders have significantly increased their holdings in Pick n Pay Stores Limited (JSE:PIK). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Pick n Pay Stores

The Last 12 Months Of Insider Transactions At Pick n Pay Stores

Over the last year, we can see that the biggest insider sale was by the Non-Executive Director, Jonathan Ackerman, for R21m worth of shares, at about R22.51 per share. That means that an insider was selling shares at slightly below the current price (R28.15). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 92% of Jonathan Ackerman's stake.

Happily, we note that in the last year insiders paid R32m for 1.98m shares. But they sold 1.27m shares for R29m. In total, Pick n Pay Stores insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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.

Insider Ownership Of Pick n Pay Stores

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Pick n Pay Stores insiders own 0.7% of the company, worth about R150m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Pick n Pay Stores Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Pick n Pay Stores shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Pick n Pay Stores insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. 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 - Pick n Pay Stores has 2 warning signs we think you should be aware of.

But note: Pick n Pay Stores 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.