Calfrac Well Services Independent Director Acquires 6.1% More Stock

Investors who take an interest in Calfrac Well Services Ltd. (TSE:CFW) should definitely note that the Independent Director, Charles Pellerin, recently paid CA$3.85 per share to buy CA$549k worth of the stock. Although the purchase only increased their holding by 6.1%, it is still a solid purchase in our view.

See our latest analysis for Calfrac Well Services

Calfrac Well Services Insider Transactions Over The Last Year

Notably, that recent purchase by Independent Director Charles Pellerin was not the only time they bought Calfrac Well Services shares this year. They previously made an even bigger purchase of CA$2.9m worth of shares at a price of CA$4.15 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being CA$3.85). It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. 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.

Calfrac Well Services insiders may have bought shares in the last year, but they didn't sell any. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

Calfrac Well Services is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Calfrac Well Services Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Calfrac Well Services insiders own 14% of the company, worth about CA$45m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Calfrac Well Services Insider Transactions Indicate?

It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Calfrac Well Services insiders are well aligned, and that they may think the share price is too low. 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. Be aware that Calfrac Well Services is showing 2 warning signs in our investment analysis, and 1 of those shouldn't be ignored...

But note: Calfrac Well Services 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.