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 Peyto Exploration & Development Corp. (TSE:PEY).
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 would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
The Last 12 Months Of Insider Transactions At Peyto Exploration & Development
Vice President of Drilling & Completions Lee Curran made the biggest insider purchase in the last 12 months. That single transaction was for CA$241k worth of shares at a price of CA$3.21 each. That means that an insider was happy to buy shares at above the current price of CA$2.70. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 215.80k shares for CA$831k. But they sold 177205 for CA$652k. In the last twelve months there was more buying than selling by Peyto Exploration & Development insiders. Their average price was about CA$3.85. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Peyto Exploration & Development is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Peyto Exploration & Development Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Peyto Exploration & Development, over the last three months. In fact, three insiders bought CA$532k worth of shares. But we did see insider selling worth CA$327k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Many investors like to check how much of a company is owned by 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 Peyto Exploration & Development insiders own 2.8% of the company, worth about CA$12m. Whilst better than nothing, we’re not overly impressed by these holdings.
So What Does This Data Suggest About Peyto Exploration & Development Insiders?
It’s certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Peyto Exploration & Development insiders are well aligned, and that they may think the share price is too low. Of course, the future is what matters most. So if you are interested in Peyto Exploration & Development, you should check out this free report on analyst forecasts for the company.
But note: Peyto Exploration & Development 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.
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