It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Crescent Point Energy Corp. (TSE:CPG), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
View our latest analysis for Crescent Point Energy
Crescent Point Energy Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Senior Vice President of Corporate Planning & Capital Markets Brad Borggard for CA$103k worth of shares, at about CA$6.87 per share. So it’s clear an insider wanted to buy, even at a higher price. Their view may have changed since then, but at least it shows they felt optimistic at the time. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 103.53k shares worth CA$780k. But they sold 3.26k for CA$33k. In the last twelve months there was more buying than selling by Crescent Point Energy insiders. The average buy price was around CA$7.53. This is nice to see since it implies that insiders might see value around current prices (around CA$4.56). 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!
Crescent Point Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Crescent Point Energy Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Crescent Point Energy. Overall, 4 insiders shelled out CA$137k for shares in the company — and none sold. This makes one think the business has some good points.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Crescent Point Energy insiders own 0.7% of the company, worth about CA$16m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Crescent Point Energy Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Crescent Point Energy shares, given these transactions (along with notable insider ownership of the company). Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Crescent Point 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.