A company insider knows how their business is performing in real time. They are often aware of potential growth opportunities for the company and what the future prospects for it are. If they’re buying company stock, it’s normally a positive development that investors should take note of.
Here, we are going to highlight insider buying activity at Perenti Global Ltd (PRN:AU). Perenti Global is a mining company that is engaged in the exploration and production of multiple commodities and also provides support services to the mining industry globally. As well as leasing, selling and maintaining equipment, the company provides a logistics service that helps move equipment around. It’s traded on the Australian Securities Exchange and currently has a market capitalization of AUD $626 million.
Perenti Global Ltd: Insider Buying
Regulatory filings show that in late August, a number of insiders at Perenti bought stock.
On 25 August, the Chairman of the Board Robert Cole purchased 100,000 PRN shares at a price of $0.81 per share. This purchase cost the insider $83,000 and doubled his holding in the company.
On the same day, Non-Executive Director Andrea Hall bought 27,500 PRN shares at a cost of just over $22,000, raising her stake by around 30% while fellow Non-Executive Director Alexandra Atkins bought 12,572 PRN shares which upped her holding by about 30%.
Then, on 26 August Timothy Longstaff, a Non-Executive Director, bought 100,000 PRN shares at a price of $0.83. This cost the insider $83,000 and started a new holding.
Finally, on 27 August, Mark Hine, a Non-Executive Director, purchased 19,480 PRN shares at a price of $0.86 per share. This upped his stake by a little over 15%.
Multiple Insider Purchases
The high number of insider trades in such a short period of time caught our attention here. It sends out a strong message to investors that the top insiders at Perenti Global are confident that the share price will move upwards in the future.
It’s worth noting that the majority of the insiders here have many years of industry experience. This means they are likely to have a good read on the company’s prospects. The Chairman of the Board has over thirty years of experience in the energy and resources sector and is a former executive director of Woodside Petroleum Ltd and a former managing director of Beach Energy Ltd. Meanwhile, many of the Non-Executive Directors have decades of experience in their fields, such as Mark Hine who has over 25 years of management experience in both surface and underground mining operations.
Well Positioned for Future Growth
Perenti Global recently released solid full-year results.
The company saw a solid performance from its underground mining business whilst the surface mining business showed an improved performance in the second half of the financial year ending June 30 2021. Revenue of $2.021 billion was stable and net profit after tax improved to a statutory gain in H2 of $11.5 million from a loss of $63.8 million in H1. The cash conversion of 105% was very strong and net debt fell 10% to just over $500 million. The company has three years’ work in hand of $6.6 billion and at 30 June had a tender pipeline of $11 billion.
“We continue to look to the future. Throughout FY21 we made prudent investments in our people and systems, while managing our balance sheet to ensure we are well positioned to fund our 2025 strategic growth aspirations. An integral part of this strategic growth is our technology driven service offering, idoba, launched in July. Through idoba we plan to improve our competitive advantage by developing a unique capability in emerging digital mining, technology and innovation,” said Mark Norwell, Managing Director and CEO of Perenti Global.
Having assessed these reassuring results, we see the recent insider transactions at Perenti Global as bullish. The company is making investments for the future and the outlook statement is optimistic. The CEO’s optimism for the business seems to be shared by many top insiders and the insider buying suggests that many of them believe the shares are currently undervalued by the market.