The CEO of medical technology business Pro Medicus Limited (ASX: PME) has just invested around $500,000 into shares of his company.
I think it's a good sign when management are willing to put money to work in the market when the share price is a lot lower. The coronavirus is causing all sorts of shares to be sold off and Pro Medicus is one of them.
Since 21 February 2020 the Pro Medicus share price has fallen by 32% (at the time of writing).
Co-founder and CEO of Pro Medicus Dr Sam Hupert has loaded up on 30,000 shares of his company.
He bought:
5,000 shares on 13 March 2020 for $15.50 per share.
18,510 shares on 16 March 2020 for $15.63 per share.
6,490 shares on 17 March 2020 for $15.48 per share.
That means he bought close to $500,000 of shares, which is quite the vote of confidence in his company's future.
In the scheme of things, that buy only makes up a small portion of his current holding – he now owns 28,137,660 shares which is worth around $439 million. To own that much of a business you must have great confidence in its long-term future.
Why this could be a good long-term buying opportunity
Pro Medicus still has a high price/earnings ratio even after the fall. But, it's one of the best businesses on the ASX with no debt, a growing cash balance, a growing dividend, growing profit and a very high earnings before interest and tax (EBIT) margin.
It's very close to its 52-week low, so unless the market drops even further this could be the buying opportunity that investors have been waiting for, particularly with how long interest rates are now.
The best businesses are worth paying up for. Pro Medicus could be one of those long-term winners. I also like that it continues to reward shareholders with fast-growing dividends.
