Insiders At Kelt Exploration Sold CA$23m In Stock, Alluding To Potential Weakness

In the last year, many Kelt Exploration Ltd. (TSE:KEL) insiders sold a substantial stake in the company which may have sparked shareholders' attention. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Kelt Exploration

The insider, Michael Shea, made the biggest insider sale in the last 12 months. That single transaction was for CA$23m worth of shares at a price of CA$6.75 each. That means that even when the share price was below the current price of CA$7.67, an insider wanted to cash in some shares. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was 87% of Michael Shea's holding.

Happily, we note that in the last year insiders paid CA$4.1m for 670.40k shares. But insiders sold 3.43m shares worth CA$23m. Over the last year we saw more insider selling of Kelt Exploration shares, than buying. You can see the insider transactions (by companies and 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!

Check out our latest analysis for Kelt Exploration

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Insider Ownership Of Kelt Exploration

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Kelt Exploration insiders own 18% of the company, currently worth about CA$282m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Kelt Exploration Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Kelt Exploration shares in the last quarter. While we feel good about high insider ownership of Kelt Exploration, we can't say the same about the selling of shares. 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. In terms of investment risks, we've identified 1 warning sign with Kelt Exploration and understanding this should be part of your investment process.

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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.