Insider Stock Buying Reaches US$2.78m On International Petroleum

Quite a few insiders have dramatically grown their holdings in International Petroleum Corporation (TSE:IPCO) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for International Petroleum

The Last 12 Months Of Insider Transactions At International Petroleum

Over the last year, we can see that the biggest insider purchase was by Chief Financial Officer Christophe Nerguararian for CA$2.0m worth of shares, at about CA$14.93 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$18.89), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

While International Petroleum insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

International Petroleum is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. International Petroleum insiders own about CA$78m worth of shares. That equates to 3.5% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About International Petroleum Insiders?

It doesn't really mean much that no insider has traded International Petroleum shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in International Petroleum and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 3 warning signs for International Petroleum (2 make us uncomfortable!) that we believe deserve your full attention.

Of course International Petroleum may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com