We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Contango Oil & Gas Company (NYSEMKT:MCF), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Contango Oil & Gas Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Non Executive Chairman John Goff for US$17m worth of shares, at about US$0.95 per share. We do like to see buying, but this purchase was made at well below the current price of US$1.99. Because it occurred at a lower valuation, it doesn’t tell us much about whether insiders might find today’s price attractive.
The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Contango Oil & Gas is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Contango Oil & Gas insiders own 20% of the company, worth about US$52m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Contango Oil & Gas Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. But insiders have shown more of an appetite for the stock, over the last year. Overall we don’t see anything to make us think Contango Oil & Gas insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Contango Oil & Gas. Our analysis shows 4 warning signs for Contango Oil & Gas (1 is potentially serious!) and we strongly recommend you look at them before investing.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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