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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Pacific Smiles Group Limited (ASX:PSQ), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Pacific Smiles Group Insider Transactions Over The Last Year
The Non-Executive Director Mark Bloom made the biggest insider purchase in the last 12 months. That single transaction was for AU$101k worth of shares at a price of AU$2.65 each. So it's clear an insider wanted to buy, at around the current price, which is AU$2.88. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Pacific Smiles Group insiders decided to buy shares at close to current prices.
In the last twelve months Pacific Smiles Group insiders were buying shares, but not selling. The average buy price was around AU$2.30. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Pacific Smiles Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Pacific Smiles Group Insiders Bought Stock Recently
There was some insider buying at Pacific Smiles Group over the last quarter. Non-Executive Chairman Zita Peach bought AU$40k worth of shares in that time. We like it when there are only buyers, and no sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Does Pacific Smiles Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Pacific Smiles Group insiders own about AU$209m worth of shares (which is 46% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About Pacific Smiles Group Insiders?
Insider purchases may have been minimal, in the last three months, but there was no selling at all. The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, Pacific Smiles Group insiders feel good about the company's future. While we like knowing 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. At Simply Wall St, we found 2 warning signs for Pacific Smiles Group that deserve your attention before buying any shares.
But note: Pacific Smiles Group 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, but not derivative transactions.
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.
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