Quite a few insiders have dramatically grown their holdings in PyroGenesis Inc. (TSE:PYR) over the past 12 months. An insider’s optimism about the company’s prospects is a positive sign.
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.
View our latest analysis for PyroGenesis
Over the last year, we can see that the biggest insider purchase was by President Photis Pascali for CA$1.2m worth of shares, at about CA$0.80 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being CA$0.57). It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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.
In the last twelve months insiders purchased 1.58m shares for CA$1.3m. On the other hand they divested 45.00k shares, for CA$30k. In total, PyroGenesis insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
PyroGenesis is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. PyroGenesis insiders own 43% of the company, currently worth about CA$45m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, PyroGenesis insiders feel good about the company’s 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. To help with this, we’ve discovered 5 warning signs (3 are a bit concerning!) that you ought to be aware of before buying any shares in PyroGenesis.
