Whilst it may not be a huge deal, we thought it was good to see that the WPX Energy, Inc. (NYSE:WPX) President, Clay Gaspar, recently bought US$95k worth of stock, for US$3.81 per share. However, we do note that it only increased their holding by 2.7%, and it wasn’t a huge purchase by absolute value, either.
WPX Energy Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Karl Kurz bought US$113k worth of shares at a price of US$11.31 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$3.73). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
WPX Energy insiders may have bought shares in the last year, but they didn’t sell any. The average buy price was around US$5.89. I’d consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
WPX Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. WPX Energy insiders own about US$20m worth of shares. That equates to 1.3% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At WPX Energy Tell Us?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. Insiders likely see value in WPX Energy shares, given these transactions (along with notable insider ownership of the company). So while it’s helpful to know what insiders are doing in terms of buying or selling, it’s also helpful to know the risks that a particular company is facing. To help with this, we’ve discovered 4 warning signs (1 shouldn’t be ignored!) that you ought to be aware of before buying any shares in WPX Energy.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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