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Trade Alert: Jennifer Forrest At Pembina Pipeline Corporation (TSE:PPL), Has Just Spent CA$58k Buying 19% More Shares

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·3-min read
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Even if it's not a huge purchase, we think it was good to see that Jennifer Forrest, a Pembina Pipeline Corporation (TSE:PPL) insider, recently shelled out CA$58k to buy stock, at CA$38.71 per share. That purchase might not be huge but it did increase their holding by 19%.

See our latest analysis for Pembina Pipeline

Pembina Pipeline Insider Transactions Over The Last Year

The Interim Chief Financial Officer, Cameron Goldade, made the biggest insider sale in the last 12 months. That single transaction was for CA$494k worth of shares at a price of CA$36.85 each. That means that even when the share price was below the current price of CA$38.55, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 39% of Cameron Goldade's stake.

Over the last year, we can see that insiders have bought 20.17k shares worth CA$748k. But insiders sold 17.15k shares worth CA$645k. Overall, Pembina Pipeline insiders were net buyers during the last year. The average buy price was around CA$37.11. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price. 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!

insider-trading-volume
insider-trading-volume

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insider Ownership of Pembina Pipeline

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 0.1% of Pembina Pipeline shares, worth about CA$26m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Pembina Pipeline Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Pembina Pipeline insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Pembina Pipeline (1 doesn't sit too well with us!) that we believe deserve your full attention.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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