We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Valeura Energy Inc. (TSE:VLE), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. 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 equally, we would consider it foolish to ignore insider transactions altogether. 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’.
Valeura Energy Insider Transactions Over The Last Year
The Chief Operating Officer, Lyle Martinson, made the biggest insider sale in the last 12 months. That single transaction was for CA$149k worth of shares at a price of CA$3.00 each. We generally don’t like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$2.31. So it is hard to draw any strong conclusion from it. Lyle Martinson was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 65000 shares worth CA$204k. But they sold 50256 for CA$149k. Overall, Valeura Energy insiders were net buyers last year. Their average price was about CA$3.14. These transactions suggest that insiders have considered the current price attractive. You can see a visual depiction of insider transactions (by individuals) 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!
Insiders at Valeura Energy Have Bought Stock Recently
It’s good to see that Valeura Energy insiders have made notable investments in the company’s shares. Overall, two insiders shelled out CA$74k for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership of Valeura Energy
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 10% of Valeura Energy shares, worth about CA$21m. 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 Valeura Energy Tell Us?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don’t feel the same about the fact the company is making losses. Insiders likely see value in Valeura Energy shares, given these transactions (along with notable insider ownership of the company). Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Valeura Energy.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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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