Q: Hi 5i,
I recently took a flyer on PRL and have a nice gain in a registered account, which has made me wonder if it's sustainable or if it might have topped out.
I see that in March alone management sold in excess of $18M worth of shares, with CEO Clive Kinross leading that charge at a million shares sold for almost $15,000,000 in return. Meanwhile, over the past year insiders have bought very little. I know management sells for all sorts of reasons that are unrelated to their view of a company's prospects, but in this particular case do you think there is cause for concern?
And secondly, is the current high P/E a sign it may be time to take the money and run?
Thanks 5i, and I look forward to your thoughts.
Peter
I recently took a flyer on PRL and have a nice gain in a registered account, which has made me wonder if it's sustainable or if it might have topped out.
I see that in March alone management sold in excess of $18M worth of shares, with CEO Clive Kinross leading that charge at a million shares sold for almost $15,000,000 in return. Meanwhile, over the past year insiders have bought very little. I know management sells for all sorts of reasons that are unrelated to their view of a company's prospects, but in this particular case do you think there is cause for concern?
And secondly, is the current high P/E a sign it may be time to take the money and run?
Thanks 5i, and I look forward to your thoughts.
Peter
5i Research Answer:
Overall insider ownership is quite high, at 48%, and so sales by executives are not as concerning here to us. PRL pays a small yield of 2.3%, is growing fast, is expanding its operations, and trades at a relatively inexpensive valuation of 10X forward earnings. Sometimes, when an investor buys a stock at the right time and the position immediately moves in one's favor, it can feel as though the move must be coming to an end, but in reality sometimes being early and right in a position is just that.