Over the last year, a good number of insiders have significantly increased their holdings in Pick n Pay Stores Limited (JSE:PIK). This is encouraging because it indicates that insiders are more optimistic about the company's prospects.

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.

Check out our latest analysis for Pick n Pay Stores

Pick n Pay Stores Insider Transactions Over The Last Year

The Non-Executive Director, Jonathan Ackerman, made the biggest insider sale in the last 12 months. That single transaction was for R21m worth of shares at a price of R22.51 each. So it's clear an insider wanted to take some cash off the table, even below the current price of R28.55. 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. We note that the biggest single sale was 92% of Jonathan Ackerman's holding.

Over the last year, we can see that insiders have bought 1.98m shares worth R31m. On the other hand they divested 1.27m shares, for R29m. In the last twelve months there was more buying than selling by Pick n Pay Stores insiders. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Pick n Pay Stores is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Pick n Pay Stores Have Bought Stock Recently

Over the last three months, we've seen significantly more insider buying, than insider selling, at Pick n Pay Stores. In total, eight insiders bought R31m worth of shares in that time. But we did see insider selling worth R29m. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.

Insider Ownership Of Pick n Pay Stores

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. From our data, it seems that Pick n Pay Stores insiders own 0.9% of the company, worth about R127m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Pick n Pay Stores Tell Us?

It's certainly positive to see the recent insider purchases. 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. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Pick n Pay Stores. That's what I like to see! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 1 warning sign for Pick n Pay Stores and we suggest you have a look.

Of course Pick n Pay Stores may not be the best stock to buy. So you may wish to see this free collection of high quality 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 of direct interests only, but not derivative transactions or indirect interests.

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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.