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It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in PureCycle Technologies, Inc.'s (NASDAQ:PCT) case, it's fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for PureCycle Technologies
PureCycle Technologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Dustin Olson bought US$220k worth of shares at a price of US$3.22 per share. Even though the purchase was made at a significantly lower price than the recent price (US$5.92), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
In the last twelve months PureCycle Technologies insiders were buying shares, but not selling. Their average price was about US$3.79. It is certainly positive to see that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Insider Ownership Of PureCycle Technologies
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. PureCycle Technologies insiders own about US$108m worth of shares (which is 11% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About PureCycle Technologies Insiders?
The fact that there have been no PureCycle Technologies insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like PureCycle Technologies insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for PureCycle Technologies and we suggest you have a look.