Yahoo Finance As Parsons Corporation's market cap (NYSE:PSN) drops to US$3.4b, insiders might be questioning their decision to buy earlier this year
Insiders who bought US$1.1m worth of Parsons Corporation's (NYSE:PSN) stock at an average buy price of US$35.03 over the last year may be disappointed by the recent 3.5% decrease in the stock. 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$992k, which is not great.
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.
Check out our latest analysis for Parsons
Parsons Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CFO & Executive VP George Ball bought US$874k worth of shares at a price of US$34.95 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$33.08). 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. 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.
While Parsons insiders bought shares during the last year, they didn't sell. 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!
Parsons 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 Parsons
For a common shareholder, it is worth checking how many shares are held by company insiders. 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 Parsons insiders own 0.4% of the company, worth about US$14m. 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 Parsons Tell Us?
It doesn't really mean much that no insider has traded Parsons shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Overall we don't see anything to make us think Parsons insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Parsons. At Simply Wall St, we found 1 warning sign for Parsons that deserve your attention before buying any shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
