Pharos Energy CFO & Director Susan Rivett Sells 35% Of Holding

We'd be surprised if Pharos Energy plc (LON:PHAR) shareholders haven't noticed that the CFO & Director, Susan Rivett, recently sold UK£108k worth of stock at UK£0.23 per share. The eyebrow raising move amounted to a reduction of 35% in their holding.

Check out our latest analysis for Pharos Energy

The Last 12 Months Of Insider Transactions At Pharos Energy

In fact, the recent sale by Susan Rivett was the biggest sale of Pharos Energy shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (UK£0.23). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 35% of Susan Rivett's holding.

Happily, we note that in the last year insiders paid UK£51k for 233.87k shares. But they sold 479.60k shares for UK£108k. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Pharos Energy better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Pharos Energy Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Pharos Energy insiders own 48% of the company, worth about UK£45m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Pharos Energy Insiders?

The insider sales have outweighed the insider buying, at Pharos Energy, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 2 warning signs with Pharos Energy and understanding these should be part of your investment process.

But note: Pharos Energy 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.

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.