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 we’ll take a look at whether insiders have been buying or selling shares in Ophir Energy Plc (LON:OPHR).
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.
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 Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Ophir Energy
In the last twelve months, the biggest single purchase by an insider was when Interim CEO & Executive Director Alan Booth bought UK£95k worth of shares at a price of UK£0.38 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.
Over the last year, we can see that insiders have bought 479.60k shares worth UK£182k. In the last twelve months there was more buying than selling by Ophir Energy insiders. The average buy price was around UK£0.38. These transactions suggest that insiders have considered the current price of UK£0.33 attractive. The chart below shows insider transactions over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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Ophir Energy Insiders Bought Stock Recently
It’s good to see that Ophir Energy insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$182k worth of shares. This is a positive in our book as it implies some confidence.
Does Ophir Energy Boast High Insider Ownership?
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. From what we can see, insiders own only about UK£420k worth of Ophir Energy shares. We might be missing something but that seems like very low insider ownership.
What Might The Insider Transactions At Ophir Energy Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But we don’t feel the same about the fact the company is making losses. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Ophir Energy stock. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Ophir Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 email@example.com.