Last week, Pinetree Capital Ltd. (TSE:PNP) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 11% last week, resulting in a CA$10m increase in the company's market worth, implying a 17% gain on their initial purchase. In other words, the original CA$961.5k purchase is now worth CA$1.13m.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
Pinetree Capital Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Member of Board of Directors Damien Leonard bought CA$350k worth of shares at a price of CA$8.76 per share. We do like to see buying, but this purchase was made at well below the current price of CA$10.65. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
While Pinetree Capital insiders bought shares during the last year, they didn't sell. The chart below shows insider transactions (by companies and 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!
See our latest analysis for Pinetree Capital
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Pinetree Capital Have Bought Stock Recently
It's good to see that Pinetree Capital insiders have made notable investments in the company's shares. We can see that President Shezad Okhai paid CA$300k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Pinetree Capital insiders own 48% of the company, currently worth about CA$46m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Pinetree Capital Insiders?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Pinetree Capital. That's what I like to see! 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. Our analysis shows 2 warning signs for Pinetree Capital (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.
Of course Pinetree Capital 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.