Have Insiders Been Selling National Energy Services Reunited Corp. (NASDAQ:NESR) Shares?

We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell National Energy Services Reunited Corp. (NASDAQ:NESR), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. 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 National Energy Services Reunited

National Energy Services Reunited Insider Transactions Over The Last Year

The insider, Hilal Al-Busaidi, made the biggest insider sale in the last 12 months. That single transaction was for US$4.6m worth of shares at a price of US$8.03 each. That means that an insider was selling shares at slightly below the current price (US$9.57). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was 92% of Hilal Al-Busaidi's stake. Notably Hilal Al-Busaidi was also the biggest buyer, having purchased US$634k worth of shares.

All up, insiders sold more shares in National Energy Services Reunited than they bought, over the last year. The average sell price was around US$7.31. It's not particularly great to see insiders were selling shares at below recent prices. But we wouldn't put too much weight on the insider selling. The chart below shows insider transactions (by companies and individuals) 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!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Insiders at National Energy Services Reunited Have Sold Stock Recently

Over the last three months, we've seen significant insider selling at National Energy Services Reunited. In total, insider Hilal Al-Busaidi sold US$4.0m worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 3.6% of National Energy Services Reunited shares, worth about US$30m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At National Energy Services Reunited Tell Us?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing National Energy Services Reunited. While conducting our analysis, we found that National Energy Services Reunited has 4 warning signs and it would be unwise to ignore these.

But note: National Energy Services Reunited 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, but not derivative transactions.

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