We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Tourmaline Oil Corp. (TSE:TOU), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Tourmaline Oil Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when William Kirker sold CA$1.3m worth of shares at a price of CA$25.19 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of CA$16.81. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid CA$4.8m for 235.40k shares. But they sold 105.22k for CA$2.4m. Overall, Tourmaline Oil insiders were net buyers last year. Their average price was about CA$20.36. These transactions suggest that insiders have considered the current price of CA$16.81 attractive. 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 like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Tourmaline Oil Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Tourmaline Oil, over the last three months. Insiders spent CA$2.2m on shares. But Independent Director John Elick sold shares worth CA$64k. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Does Tourmaline Oil Boast High Insider Ownership?
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. It’s great to see that Tourmaline Oil insiders own 8.1% of the company, worth about CA$375m. 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 Does This Data Suggest About Tourmaline Oil Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Tourmaline Oil. That’s what I like to see! 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.
Of course Tourmaline Oil may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 email@example.com.