It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Seven Generations Energy Ltd. (TSE:VII).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia 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’.
The Last 12 Months Of Insider Transactions At Seven Generations Energy
In the last twelve months, the biggest single purchase by an insider was when Chairman of the Board Mark Monroe bought CA$583k worth of shares at a price of CA$9.88 per share. That means that even when the share price was higher than CA$6.54 (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. In our view, the price an insider pays 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.
Over the last year, we can see that insiders have bought 201k shares worth CA$1.9m. But insiders sold 66417 shares worth CA$431k. In the last twelve months there was more buying than selling by Seven Generations Energy insiders. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Seven Generations Energy Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Seven Generations Energy shares over the last three months. In total, insider Jordan Johnsen sold CA$429k worth of shares in that time. Meanwhile insiders bought CA$232k worth. Since the selling really does outweigh the buying, we’d say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Based on our data, Seven Generations Energy insiders have about 0.3% of the stock, worth approximately CA$6.1m. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Seven Generations Energy Tell Us?
The insider sales have outweighed the insider buying, at Seven Generations Energy, in the last three months. But we take heart from prior transactions. But we’d like it if insiders owned more stock, overall. So overall it’s hard to argue insiders are bullish. Of course, the future is what matters most. So if you are interested in Seven Generations Energy, you should check out this free report on analyst forecasts for the company.
Of course Seven Generations Energy 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, but not derivative transactions.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.