Top-level insiders such as C-suite executives tend to have a good understanding of their companies’ operating activities. If they’re buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight an interesting CFO purchase at Piedmont Lithium Inc (PLL:US). Piedmont Lithium is a lithium company that develops battery-grade lithium hydroxide and other chemicals essential to the electric vehicle (EV) and battery storage markets. Founded in Australia in 2016, it moved its headquarters to North Carolina last year, where it hopes to develop one of the largest lithium projects in the US. The company is listed on both the Australian Stock Exchange and the Nasdaq and currently has a market cap of USD $613 million.
Insider Buying at Piedmont Lithium
Our insider transaction data shows that on July 7, Piedmont’s CFO Michael White purchased 2,700 shares at a price of USD $37.49 per share. This trade cost the insider $101,221 and increased his holding to 13,200 shares.
What stands out here is the fact that Mr. White has upped his stake in the company by approximately 26%. This indicates that the insider is quite confident that Piedmont shares will rise from current levels. Our Insider Model views this trading activity as bullish.
It’s also worth noting that Mr. White has extensive experience in the finance space, including experience in mergers and acquisitions and initial public offerings. This means that he is likely to have a good understanding of the company’s investment potential.
Significant Share Price Fall
Piedmont Lithium shares have experienced a significant pullback in recent months, falling from around $80 to near $30. The main reason for this decline is that the company’s North Carolina project – which is based near major EV manufacturers – has been held up by regulatory issues. The company does not have an expectation of when this facility will open.
However, Piedmont has other lithium projects in development. One such project is the North American Lithium (NAL) plant in Quebec, which it owns 25% of via an equity stake in Sayona Quebec. And this appears to be progressing well. In late June, it was announced that Sayona and Piedmont had approved the restart of spodumene concentrate production at the plant with operations expected to commence in the first half of 2023.
“We are excited to take this essential next step toward supplying much-needed North American lithium resources,” commented Piedmont President and CEO Keith Phillips. “Authorizing the restart of the NAL project is consistent with our plan to become a revenue generating company in 2023 and contributes to our strategic goal of becoming a leading North American lithium producer through our integrated portfolio of lithium projects,” he added.
In light of this development, and the significant share price fall, we see the insider buying here as a bullish indicator.