Are Insiders Buying Repsol, S.A. (BME:REP) Stock?

By
Simply Wall St
Published
April 01, 2019
BME:REP
Source: Shutterstock

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 shareholders might well want to know whether insiders have been buying or selling shares in Repsol, S.A. (BME:REP).

What Is Insider Selling?

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 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'.

View our latest analysis for Repsol

Repsol Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO & Executive Director Josu Imaz San Miguel for €329k worth of shares, at about €16.30 per share. That means that even when the share price was higher, an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.

Happily, we note that in the last year insiders bought 44.72k shares for a total of €723k. In total, Repsol insiders bought more than they sold over the last year. The average buy price was around €16.17. I'd consider this a positive as it suggests insiders see value at around the current price, which is €15.26. 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!

BME:REP Recent Insider Trading, April 1st 2019
BME:REP Recent Insider Trading, April 1st 2019

Repsol is not the only stock that insiders are buying. For those who like to find winning investments this freelist of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Repsol Have Bought Stock Recently

Over the last quarter, Repsol insiders have spent a meaningful amount on shares. Specifically, Josu Imaz San Miguel bought €76k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does Repsol 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Repsol insiders own 0.07% of the company, worth about €16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Repsol Insider Transactions Indicate?

It is good to see recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Repsol insiders are well aligned, and that they may think the share price is too low. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this freereport showing analyst forecasts for its future.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this freelist of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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