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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Phoenix Global Resources plc (LON:PGR).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
View our latest analysis for Phoenix Global Resources
The Last 12 Months Of Insider Transactions At Phoenix Global Resources
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Michael Derek Rake bought UK£66k worth of shares at a price of UK£0.22 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.21). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing 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.
Happily, we note that in the last year insiders bought 757k shares for a total of UK£172k. Phoenix Global Resources may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Phoenix Global Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Phoenix Global Resources. We can see that Michael Derek Rake paid US$93k for shares in the company. No-one sold. This makes one think the business has some good points.