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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of PZ Cussons plc (LON:PZC), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for PZ Cussons
The Last 12 Months Of Insider Transactions At PZ Cussons
Over the last year, we can see that the biggest insider purchase was by Independent Chairman David Tyler for UK£50k worth of shares, at about UK£1.07 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.80). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months PZ Cussons insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
PZ Cussons is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership Of PZ Cussons
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. It appears that PZ Cussons insiders own 3.0% of the company, worth about UK£10m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The PZ Cussons Insider Transactions Indicate?
It doesn't really mean much that no insider has traded PZ Cussons shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think PZ Cussons insiders are doubting the company, and they do own shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of PZ Cussons.