Investors who take an interest in Kosmos Energy Ltd. (NYSE:KOS) should definitely note that the Director, Steven Sterin, recently paid US$2.10 per share to buy US$105k worth of the stock. We reckon that’s a good sign, especially since the purchase boosted their holding by 203%.
Kosmos Energy Insider Transactions Over The Last Year
In fact, the recent purchase by Steven Sterin was the biggest purchase of Kosmos Energy shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$0.80 (the recent price), an insider wanted to purchase shares. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. To us, it’s very important to consider the price insiders pay for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Steven Sterin was the only individual insider to buy over the year.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Kosmos Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Kosmos Energy Boast High Insider Ownership?
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. Kosmos Energy insiders own about US$14m worth of shares. That equates to 4.2% 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 Kosmos Energy Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Kosmos Energy insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it’s also worthwhile knowing the risks facing this company. For instance, we’ve identified 2 warning signs for Kosmos Energy (1 is potentially serious) you should be aware of.
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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