The recent 17% drop in Panther Metals PLC's (LON:PALM) stock could come as a blow to insiders who purchased UK£65.7k worth of stock at an average buy price of UK£0.89 over the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only UK£30.4k.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Nicholas John O'Reilly bought UK£46k worth of shares at a price of UK£0.98 per share. That means that an insider was happy to buy shares at above the current price of UK£0.41. 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. We note that Nicholas John O'Reilly was both the biggest buyer and the biggest seller.
In the last twelve months insiders purchased 74.14k shares for UK£66k. On the other hand they divested 53.07k shares, for UK£46k. In total, Panther Metals 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 want to know exactly who sold, for how much, and when, simply click on the graph below!
View our latest analysis for Panther Metals
Panther Metals is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Panther Metals insiders own 53% of the company, worth about UK£1.5m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
The fact that there have been no Panther Metals insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Panther Metals insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Panther Metals. In terms of investment risks, we've identified 4 warning signs with Panther Metals and understanding these should be part of your investment process.
Of course Panther Metals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.