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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Peyto Exploration & Development Corp. (TSE:PEY).
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for Peyto Exploration & Development
The Last 12 Months Of Insider Transactions At Peyto Exploration & Development
Over the last year, we can see that the biggest insider purchase was by Scott Robinson for CA$575k worth of shares, at about CA$11.50 per share. That means that even when the share price was higher than CA$5.65 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 88800 shares for CA$947k. On the other hand they divested 230k shares, for CA$2.3m. Over the last year we saw more insider selling of Peyto Exploration & Development shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Peyto Exploration & Development Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Peyto Exploration & Development. In total, insiders bought CA$130k worth of shares in that time, and we didn’t record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
Does Peyto Exploration & Development Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Peyto Exploration & Development insiders own 2.7% of the company, worth about CA$25m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Peyto Exploration & Development Tell Us?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. While recent transactions indicate confidence in Peyto Exploration & Development, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. In short they are likely aligned with shareholders. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Peyto Exploration & Development.
But note: Peyto Exploration & Development 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.