Insiders who bought US$134.9m worth of P.A.M. Transportation Services, Inc. (NASDAQ:PTSI) stock in the last year recovered part of their losses as the stock rose by 14% last week. However, total losses seen by insiders are still US$14m since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

P.A.M. Transportation Services Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Matthew Moroun bought US$135m worth of shares at a price of US$21.23 per share. That means that an insider was happy to buy shares at above the current price of US$19.08. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. We note that Matthew Moroun was both the biggest buyer and the biggest seller.

Over the last year, we can see that insiders have bought 6.36m shares worth US$135m. On the other hand they divested 6.35m shares, for US$135m. In the last twelve months there was more buying than selling by P.A.M. Transportation Services insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

P.A.M. Transportation Services is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. P.A.M. Transportation Services insiders own 74% of the company, currently worth about US$304m based on the recent share price. 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 Do The P.A.M. Transportation Services Insider Transactions Indicate?

The fact that there have been no P.A.M. Transportation Services insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like P.A.M. Transportation Services insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing P.A.M. Transportation Services. For example, P.A.M. Transportation Services has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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