It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Laredo Petroleum, Inc. (NYSE:LPI).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.
Laredo Petroleum Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the insider, Charles Kaye, for US$193k worth of shares, at about US$2.76 per share. That means that an insider was selling shares at around the current price of US$2.34. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive). The only individual insider seller over the last year was Charles Kaye.
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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Laredo Petroleum
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Laredo Petroleum insiders own 2.7% of the company, worth about US$15m. 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 Laredo Petroleum Tell Us?
It doesn’t really mean much that no insider has traded Laredo Petroleum shares in the last quarter. Still, the insider transactions at Laredo Petroleum in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Laredo Petroleum.
But note: Laredo Petroleum 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 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.
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.