We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Baytex Energy Corp. (TSE:BTE).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
The Last 12 Months Of Insider Transactions At Baytex Energy
In the last twelve months, the biggest single purchase by an insider was when Lead Independent Director Mark Bly bought CA$405k worth of shares at a price of CA$4.50 per share. That means that even when the share price was higher than CA$2.80 (the recent price), an insider wanted to purchase shares. 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 422k shares for CA$1.2m. On the other hand they divested 196k shares, for CA$582k. In the last twelve months there was more buying than selling by Baytex Energy insiders. The average buy price was around CA$2.94. 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. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Baytex Energy is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Baytex Energy Have Bought Stock Recently
There was some insider buying at Baytex Energy over the last quarter. Insiders purchased CA$50k worth of shares in that period. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Does Baytex Energy Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Baytex Energy insiders own 1.6% of the company, worth about CA$25m. 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 Baytex Energy Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). That said, the purchases were not large. On a brighter note, the transactions over the last year are encouraging. Insiders do have a stake in Baytex Energy and their transactions don’t cause us concern. Of course, the future is what matters most. So if you are interested in Baytex Energy, you should check out this free report on analyst forecasts for the company.
But note: Baytex 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.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.