National Energy Services Reunited Corp.'s (NASDAQ:NESR)) market cap declines to US$905m but insiders who sold US$3.1m stock were able to hedge their losses

By
Simply Wall St
Published
December 01, 2021
NasdaqCM:NESR
Source: Shutterstock

Over the past year, insiders sold US$3.1m worth of National Energy Services Reunited Corp. (NASDAQ:NESR) stock at an average price of US$12.90 per share allowing them to get the most out of their money. The company’s market cap plunged by US$73m after price dropped by 7.5% last week but insiders were able to limit their loss to an extent.

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

View our latest analysis for National Energy Services Reunited

National Energy Services Reunited Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Yasser Barami, sold US$3.1m worth of shares at a price of US$14.75 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 US$9.91. So it may not shed much light on insider confidence at current levels. Yasser Barami was the only individual insider to sell shares in the last twelve months.

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!

insider-trading-volume
NasdaqCM:NESR Insider Trading Volume December 1st 2021

I will like National Energy Services Reunited better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does National Energy Services Reunited 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 appears that National Energy Services Reunited insiders own 2.8% of the company, worth about US$25m. 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 Do The National Energy Services Reunited Insider Transactions Indicate?

The fact that there have been no National Energy Services Reunited insider transactions recently certainly doesn't bother us. Still, the insider transactions at National Energy Services Reunited in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. 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. While conducting our analysis, we found that National Energy Services Reunited has 3 warning signs and it would be unwise to ignore them.

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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