Strathcona Resources Insiders Added CA$10.5m Of Stock To Their Holdings

Multiple insiders secured a larger position in Strathcona Resources Ltd. (TSE:SCR) shares over the last 12 months. This is reassuring as this suggests that insiders have increased optimism about the company's prospects.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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Strathcona Resources Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Non-Independent Director Andrew Kim bought CA$6.5m worth of shares at a price of CA$29.00 per share. That implies that an insider found the current price of CA$30.43 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Strathcona Resources insiders decided to buy shares at close to current prices.

Over the last year, we can see that insiders have bought 365.34k shares worth CA$11m. But they sold 4.00 shares for CA$118. In the last twelve months there was more buying than selling by Strathcona Resources insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

View our latest analysis for Strathcona Resources

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Strathcona Resources Have Bought Stock Recently

At Strathcona Resources,over the last quarter, we have observed quite a lot more insider buying than insider selling. In fact, two insiders bought CA$327k worth of shares. On the other hand, President of SCR Lloydminster Conventional Seamus Murphy netted CA$118 by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Strathcona Resources insiders own 0.3% of the company, worth about CA$22m. 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 Strathcona Resources Insiders?

It's certainly positive to see the recent insider purchases. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Strathcona Resources shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Strathcona Resources (1 is potentially serious!) and we strongly recommend you look at them before investing.

Of course Strathcona Resources 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.