Should You Take Comfort From Insider Transactions At Inplay Oil Corp. (TSE:IPO)?

We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Inplay Oil Corp. (TSE:IPO).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.’

See our latest analysis for Inplay Oil

Inplay Oil Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Douglas Bartole bought CA$99k worth of shares at a price of CA$1.80 per share. That means that even when the share price was higher, 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. That purchase may suggest an expectation of positive returns over the long term. The only individual insider to buy over the last year was Douglas Bartole. Notably Douglas Bartole was also the biggest seller, having sold CA$80k worth of shares.

Douglas Bartole bought 95.00k shares over the last 12 months at an average price of CA$1.67. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

TSX:IPO Insider Trading December 18th 18
TSX:IPO Insider Trading December 18th 18

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Does Inplay Oil Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Inplay Oil insiders own 1.4% of the company, currently worth about CA$910k based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Inplay Oil Tell Us?

The fact that there have been no Inplay Oil insider transactions recently certainly doesn’t bother us. On a brighter note, the transactions over the last year are encouraging. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Inplay Oil insiders are doubting the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Inplay Oil.

But note: Inplay Oil 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.

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.