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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. 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 shareholders might well want to know whether insiders have been buying or selling shares in TransGlobe Energy Corporation (NASDAQ:TGA).
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, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At TransGlobe Energy
Non-Executive Director Ross Clarkson made the biggest insider sale in the last 12 months. That single transaction was for US$1.7m worth of shares at a price of US$3.35 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$2.07. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Ross Clarkson.
Happily, we note that in the last year insiders paid US$273k for 139.79k shares. But insiders sold 543.95k shares worth US$1.8m. Ross Clarkson ditched 543.95k shares over the year. The average price per share was US$3.28. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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 TransGlobe Energy Have Bought Stock Recently
It’s good to see that TransGlobe Energy insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$195k worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership of TransGlobe Energy
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 4.2% of TransGlobe Energy shares, worth about US$6.3m, according to our data. Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Do The TransGlobe Energy Insider Transactions Indicate?
The recent insider purchases are heartening. But we can’t say the same for the transactions over the last 12 months. The transactions over the last year don’t give us confidence, and nor does the fairly low insider ownership, but at least the recent buying is a positive. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for TransGlobe Energy.
But note: TransGlobe Energy 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.