Those following along with ProFrac Holding Corp. (NASDAQ:ACDC) will no doubt be intrigued by the recent purchase of shares by Matthew Wilks, Executive Chairman & President of the company, who spent a stonking US$623k on stock at an average price of US$7.79. While that only increased their holding size by 5.6%, it is still a big swing by our standards.
The Last 12 Months Of Insider Transactions At ProFrac Holding
In fact, the recent purchase by Matthew Wilks was the biggest purchase of ProFrac Holding shares made by an insider individual in the last twelve months, according to our records. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$9.13. 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.
Matthew Wilks purchased 89.96k shares over the year. The average price per share was US$7.91. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.
Insider Ownership Of ProFrac Holding
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. ProFrac Holding insiders own about US$44m worth of shares. That equates to 3.0% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At ProFrac Holding Tell Us?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest ProFrac Holding insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ProFrac Holding. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of ProFrac Holding.
But note: ProFrac Holding may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.