It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Pinnacle Renewable Energy Inc. (TSE:PL).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At Pinnacle Renewable Energy
Independent Director Rex McLennan made the biggest insider purchase in the last 12 months. That single transaction was for CA$91k worth of shares at a price of CA$9.13 each. That means that even when the share price was higher than CA$3.87 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Pinnacle Renewable Energy insiders may have bought shares in the last year, but they didn't sell any. Their average price was about CA$6.53. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Pinnacle Renewable Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Pinnacle Renewable Energy Insiders Bought Stock Recently
It's good to see that Pinnacle Renewable Energy insiders have made notable investments in the company's shares. In total, insiders bought CA$235k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Pinnacle Renewable Energy
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. Our data suggests Pinnacle Renewable Energy insiders own 4.2% of the company, worth about CA$5.5m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Pinnacle Renewable Energy Tell Us?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Pinnacle Renewable Energy insiders are expecting a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 5 warning signs we've spotted with Pinnacle Renewable Energy (including 1 which makes us a bit uncomfortable).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.
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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. 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. Thank you for reading.