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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 Powerhouse Ventures Limited's (ASX:PVL) case, it's fantastic news for shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Powerhouse Ventures
Powerhouse Ventures Insider Transactions Over The Last Year
The Director Joseph Demase made the biggest insider purchase in the last 12 months. That single transaction was for AU$250k worth of shares at a price of AU$0.10 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.09). 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.
In the last twelve months insiders purchased 3.50m shares for AU$350k. But they sold 2.81m shares for AU$307k. Overall, Powerhouse Ventures insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Powerhouse Ventures is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Powerhouse Ventures Have Bought Stock Recently
Over the last quarter, Powerhouse Ventures insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$350k worth of shares. This is a positive in our book as it implies some confidence.
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. It appears that Powerhouse Ventures insiders own 34% of the company, worth about AU$3.7m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.