Should You Be Worried About Insider Transactions At TGS-NOPEC Geophysical Company ASA (OB:TGS)?

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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in TGS-NOPEC Geophysical Company ASA (OB:TGS).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

View our latest analysis for TGS-NOPEC Geophysical

TGS-NOPEC Geophysical Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Senior Vice President of Data Processing and Research & Development, Zhiming Li, sold øre11m worth of shares at a price of øre348 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is øre222. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Zhiming Li.

Happily, we note that in the last year insiders paid øre789k for 3100 shares. But insiders sold 32800 shares worth øre11m. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

OB:TGS Recent Insider Trading, June 13th 2019
OB:TGS Recent Insider Trading, June 13th 2019

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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. TGS-NOPEC Geophysical insiders own about øre354m worth of shares. That equates to 1.6% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At TGS-NOPEC Geophysical Tell Us?

It doesn’t really mean much that no insider has traded TGS-NOPEC Geophysical shares in the last quarter. While we feel good about high insider ownership of TGS-NOPEC Geophysical, we can’t say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in TGS-NOPEC Geophysical, you should check out this free report on analyst forecasts for the company.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.

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