Yahoo Finance Insiders who purchased this year lose US$64k as Prudential plc (LON:PRU) stock drops to UK£7.98
Insiders who acquired US$278k worth of Prudential plc's (LON:PRU) stock at an average price of US$10.35 in the past 12 months may be dismayed by the recent 10% price decline. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$214k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Prudential
Prudential Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Group CFO & Executive Director Stuart Turner bought UK£106k worth of shares at a price of UK£10.60 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£7.98). 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. 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 Prudential insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Prudential 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.
Insider Ownership Of Prudential
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. Insiders own 0.05% of Prudential shares, worth about UK£12m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Prudential Tell Us?
It doesn't really mean much that no insider has traded Prudential 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 Prudential insiders are doubting the company, and they do own shares. Therefore, you should definitely take a look at this FREE report showing analyst forecasts for Prudential.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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