We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in PDC Energy, Inc. (NASDAQ:PDCE).
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, such insiders must disclose their trading activities, and not trade on inside information.
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’.
PDC Energy Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Executive Vice President of Corporate Development & Strategy Lance Lauck sold US$540k worth of shares at a price of US$53.95 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$34.02. So it may not tell us anything about how insiders feel about the current share price.
In the last twelve months insiders netted US$3.6m for 64.50k shares sold. In total, PDC Energy insiders sold more than they bought over the last year. The sellers received a price of around US$55.33, on average. Insider selling doesn’t make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$34.02. You can see the insider transactions (by 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at PDC Energy Have Sold Stock Recently
The last three months saw significant insider selling at PDC Energy. In total, insiders sold US$189k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of PDC Energy
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. PDC Energy insiders own about US$12m worth of shares. That equates to 0.6% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At PDC Energy Tell Us?
Insiders haven’t bought PDC Energy stock in the last three months, but there was some selling. And there weren’t any purchases to give us comfort, over the last year. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in PDC Energy, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.