Phoenix Motor Inc. (NASDAQ:PEV) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 13% decline in the stock price. After taking the recent loss into consideration, the US$12.2m worth of stock they bought is now worth US$15.2m, indicating that their investment yielded a positive return.
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.
Check out our latest analysis for Phoenix Motor
The Last 12 Months Of Insider Transactions At Phoenix Motor
In the last twelve months, the biggest single purchase by an insider was when CEO & Chairman of the Board Xiaofeng Peng bought US$12m worth of shares at a price of US$1.02 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$1.27. Because the shares were purchased at a lower price, this particular buy doesn’t tell us much about how insiders feel about the current share price.
The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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.
Does Phoenix Motor Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Phoenix Motor insiders own about US$16m worth of shares (which is 59% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Phoenix Motor Insiders?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Phoenix Motor. Looks promising! So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. Case in point: We’ve spotted 5 warning signs for Phoenix Motor you should be aware of, and 3 of them don’t sit too well with us.
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 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.
