Have Insiders Been Buying Obsidian Energy Ltd. (TSE:OBE) Shares?

It is not uncommon to see companies perform well in the years after insiders buy shares. 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 shareholders might well want to know whether insiders have been buying or selling shares in Obsidian Energy Ltd. (TSE:OBE).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.

We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.

Check out our latest analysis for Obsidian Energy

The Last 12 Months Of Insider Transactions At Obsidian Energy

Independent Director John Brydson made the biggest insider purchase in the last 12 months. That single transaction was for CA$118k worth of shares at a price of CA$2.76 each. That means that an insider was happy to buy shares at above the current price of CA$1.11. It's very possible they regret the purchase, but it's more likely they are bullish about the company. 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.

Obsidian Energy insiders may have bought shares in the last year, but they didn't sell any. Their average price was about CA$3.15. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Obsidian Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From our data, it seems that Obsidian Energy insiders own 8.9% of the company, worth about CA$7.2m. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

What Might The Insider Transactions At Obsidian Energy Tell Us?

It doesn't really mean much that no insider has traded Obsidian Energy shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. We'd like to see bigger individual holdings. However, we don't see anything to make us think Obsidian Energy insiders are doubting the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

But note: Obsidian Energy 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.