MEG Energy Insiders Sold CA$14m Of Shares Suggesting Hesitancy

In the last year, many MEG Energy Corp. (TSE:MEG) 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 we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for MEG Energy

The Last 12 Months Of Insider Transactions At MEG Energy

Over the last year, we can see that the biggest insider sale was by the insider, Derek Evans, for CA$8.9m worth of shares, at about CA$28.58 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of CA$22.71. So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid CA$1.7m for 70.22k shares. On the other hand they divested 500.10k shares, for CA$14m. In total, MEG Energy insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

MEG Energy Insiders Bought Stock Recently

Over the last quarter, MEG Energy insiders have spent a meaningful amount on shares. Overall, six insiders shelled out CA$1.2m for shares in the company -- and none sold. This makes one think the business has some good points.

Insider Ownership Of MEG Energy

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that MEG Energy insiders own 0.4% of the company, worth about CA$25m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About MEG Energy Insiders?

It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by MEG Energy insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. Overall they seem reasonably aligned. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for MEG Energy you should be aware of.

But note: MEG Energy 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.