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 we’ll take a look at whether insiders have been buying or selling shares in Secure Energy Services Inc (TSE:SES).
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. 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.’
View our latest analysis for Secure Energy Services
The Last 12 Months Of Insider Transactions At Secure Energy Services
Over the last year, we can see that the biggest insider purchase was by Executive Vice President of Processing Corey Higham for CA$70k worth of shares, at about CA$7.00 per share. That implies that an insider found the current (approximate) price enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. We generally consider it a positive if insiders have been buying on market, even if the share price has increased a bit since then.
In the last twelve months insiders purchased 11.80k shares for CA$84k. On the other hand they divested 1.34k shares, for CA$11k. In total, Secure Energy Services insiders bought more than they sold over the last year. They paid about CA$7.16 on average. This is nice to see since it implies that insiders might see value around current prices (around CA$7.10). You can see a visual depiction of insider transactions 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 are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Have Secure Energy Services Insiders Traded Recently?
In the last three months, Executive Vice President of Processing Corey Higham sold CA$231 worth of shares. That’s not much at all. Looking at the net result, we don’t think this recent trading sheds much light on how insiders, as a group, are feeling about the company’s prospects.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 3.8% of Secure Energy Services shares, worth about CA$33m. While this is strong but not in the top group, when it comes to insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Secure Energy Services Insider Transactions Indicate?
We note a that there’s been a little more insider selling than buying, recently. But the difference is small, and thus, not concerning. 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 Secure Energy Services insiders are doubting the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Secure Energy Services 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.