Shareholders Can't Ignore US$934k Of Sales By Gulf Keystone Petroleum Insiders

Despite a 11% gain in Gulf Keystone Petroleum Limited's (LON:GKP) stock price this week, shareholders shouldn't let up. In spite of the relatively cheap prices, insiders made the decision to sell US$934k worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Gulf Keystone Petroleum

Gulf Keystone Petroleum Insider Transactions Over The Last Year

The CFO & Director Ian Weatherdon made the biggest insider purchase in the last 12 months. That single transaction was for UK£849k worth of shares at a price of UK£1.35 each. That means that even when the share price was higher than UK£1.05 (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. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Ian Weatherdon was also the biggest seller.

In the last twelve months insiders purchased 630.06k shares for UK£850k. On the other hand they divested 713.03k shares, for UK£934k. All up, insiders sold more shares in Gulf Keystone Petroleum than they bought, over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data suggests Gulf Keystone Petroleum insiders own 0.6% of the company, worth about UK£1.4m. We consider this fairly low insider ownership.

What Might The Insider Transactions At Gulf Keystone Petroleum Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Our analysis of Gulf Keystone Petroleum insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Gulf Keystone Petroleum. Case in point: We've spotted 1 warning sign for Gulf Keystone Petroleum you should be aware of.

Of course Gulf Keystone Petroleum 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.