Insiders who bought Pacific Nickel Mines Limited (ASX:PNM) last year must be regretting not buying more as market cap hits AU$28m




  • In Business
  • 2021-10-23 23:14:47Z
  • By Simply Wall St.
 

Pacific Nickel Mines Limited (ASX:PNM) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 30% resulting in a AU$6.4m addition to the company's market value. Put another way, the original AU$467k acquisition is now worth AU$1.3m.

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.

Check out our latest analysis for Pacific Nickel Mines

The Last 12 Months Of Insider Transactions At Pacific Nickel Mines

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director James Dean for AU$280k worth of shares, at about AU$0.05 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.13. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Over the last year, we can see that insiders have bought 10.13m shares worth AU$467k. But insiders sold 1.03m shares worth AU$52k. In total, Pacific Nickel Mines insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Pacific Nickel Mines is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Does Pacific Nickel Mines Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Pacific Nickel Mines insiders own about AU$8.4m worth of shares. That equates to 30% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Pacific Nickel Mines Tell Us?

The fact that there have been no Pacific Nickel Mines insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Pacific Nickel Mines and their transactions don't cause us concern. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Pacific Nickel Mines is showing 6 warning signs in our investment analysis, and 4 of those are a bit unpleasant...

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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