Stock Analysis

Are Insiders Buying Gulf Keystone Petroleum Limited (LON:GKP) Stock?

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LSE:GKP
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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Gulf Keystone Petroleum Limited (LON:GKP).

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, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

View our latest analysis for Gulf Keystone Petroleum

The Last 12 Months Of Insider Transactions At Gulf Keystone Petroleum

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Garrett Soden bought UK£65k worth of shares at a price of UK£0.92 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of UK£1.69. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months Gulf Keystone Petroleum insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and 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!

insider-trading-volume
LSE:GKP Insider Trading Volume February 19th 2021

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

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. Our data isn't picking up on much insider ownership at Gulf Keystone Petroleum, though insiders do hold about UK£252k worth of shares. This level of insider ownership is notably low, and not very encouraging.

So What Does This Data Suggest About Gulf Keystone Petroleum Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Gulf Keystone Petroleum insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Gulf Keystone Petroleum has 1 warning sign we think you should be aware of.

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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