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 before you buy or sell New West Energy Services Inc (CVE:NWE), you may well want to know whether insiders have been buying or selling.
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.
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’.
The Last 12 Months Of Insider Transactions At New West Energy Services
Over the last year, we can see that the biggest insider purchase was by Lead Director William Rand for CA$750k worth of shares, at about CA$0.10 per share. That means that an insider was happy to buy shares at above the current price. 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 above the current price. The only inside buyer over the last year was William Rand.
William Rand bought a total of 7.60m shares over the year at an average price of CA$0.099. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does New West Energy Services Boast High 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. A high insider ownership often makes company leadership more mindful of shareholder interests. New West Energy Services insiders own about CA$577k worth of shares. That equates to 39% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The New West Energy Services Insider Transactions Indicate?
Our data shows a little more insider buying than selling in the last three months. But the net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. Overall we don’t see anything to make us think New West Energy Services insiders are doubting the company, and they do own shares. Along with insider transactions, I recommend checking if New West Energy Services is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: New West 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 firstname.lastname@example.org.