Tullow Oil Up 47%, Insiders Still Down After US$487.7k Purchase

Insiders who bought US$487.7k worth of Tullow Oil plc (LON:TLW) stock in the last year recovered part of their losses as the stock rose by 47% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled US$272k since the time of purchase.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Tullow Oil

The Independent Non-Executive Director Roald Goethe made the biggest insider purchase in the last 12 months. That single transaction was for UK£238k worth of shares at a price of UK£0.12 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£0.06). 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. To us, it's very important to consider the price insiders pay for shares. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Roald Goethe was the only individual insider to buy during the last year.

Roald Goethe bought 3.60m shares over the last 12 months at an average price of UK£0.14. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

View our latest analysis for Tullow Oil

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership Of Tullow Oil

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Tullow Oil insiders own 9.1% of the company, worth about UK£8.1m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Tullow Oil Insiders?

It doesn't really mean much that no insider has traded Tullow Oil shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Tullow Oil stock. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. You'd be interested to know, that we found 2 warning signs for Tullow Oil and we suggest you have a look.

Of course Tullow Oil 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.