Q: I have been adding to my positions in PRL around current levels thinking that the results looked good and future growth prospects were promising. So I thought.
Yet while I have been buying PRL shares I notice that there has been heavy selling of shares by company insiders. I realize that shares could be sold for various reasons by cooperate insiders but my sense is that selling by insiders around the current share price has been extreme. It does not appear to be a vote of confidence in future growth prospects by company insiders. What do they know that we do not? I would appreciate your comments. If insiders are heavily selling the shares at current levels, why should we be buying or holding the shares.
Yet while I have been buying PRL shares I notice that there has been heavy selling of shares by company insiders. I realize that shares could be sold for various reasons by cooperate insiders but my sense is that selling by insiders around the current share price has been extreme. It does not appear to be a vote of confidence in future growth prospects by company insiders. What do they know that we do not? I would appreciate your comments. If insiders are heavily selling the shares at current levels, why should we be buying or holding the shares.
5i Research Answer:
Keep in mind many (all) companies have 'blackout' periods before and after earnings releases, so some selling can be concentrated at certain times as insiders cannot sell at other times. There has been some activity certainly at PRL. Some is option related. But, considering that insiders own 26% of the company, and the shares have risen 189% in the past year and 97% in 2024, the dollar-value of exposure for insiders is still significantly higher than it was a short time ago, even with some selling. With more than $200M in capital at risk, we would still consider the insider ownership quite significant and would be less inclined to be worried about recent sells.