Reach Subsea Reaches kr2.4b Market Cap Benefiting Insider Stock Buying

Reach Subsea ASA (OB:REACH) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a kr261m addition to the company’s market value. In other words, the original kr1.08m purchase is now worth kr1.31m.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for Reach Subsea

Reach Subsea Insider Transactions Over The Last Year

The Independent Director Kristine Skeie made the biggest insider purchase in the last 12 months. That single transaction was for kr880k worth of shares at a price of kr8.80 each. That means that even when the share price was higher than kr8.70 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Over the last year, we can see that insiders have bought 150.00k shares worth kr1.1m. On the other hand they divested 100.00k shares, for kr877k. In total, Reach Subsea insiders bought more than they sold over the last year. They paid about kr7.23 on average. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

Reach Subsea is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership Of Reach Subsea

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. Our data indicates that Reach Subsea insiders own about kr85m worth of shares (which is 3.6% of the company). However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Do The Reach Subsea Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Reach Subsea shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Reach Subsea and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for Reach Subsea you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.