Insiders of Mammoth Energy Services, Inc. (NASDAQ:TUSK) forfeit last week's 12% gains after selling stock earlier this year

By
Simply Wall St
Published
April 13, 2022
NasdaqGS:TUSK
Source: Shutterstock

While Mammoth Energy Services, Inc. (NASDAQ:TUSK) shareholders have had a good week with the stock up 12%, insiders can't say the same having sold stock over the past year. Had they waited, they might have been able to sell their stock at much higher prices and thereby received a better value on their investment.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

View our latest analysis for Mammoth Energy Services

The Last 12 Months Of Insider Transactions At Mammoth Energy Services

In the last twelve months, the biggest single sale by an insider was when the CFO & Company Secretary, Mark Layton, sold US$82k worth of shares at a price of US$2.04 per share. That means that an insider was selling shares at slightly below the current price (US$2.36). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 33% of Mark Layton's holding. Mark Layton was the only individual insider to sell shares in the last twelve months.

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!

insider-trading-volume
NasdaqGS:TUSK Insider Trading Volume April 13th 2022

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

Mammoth Energy Services Insiders Are Selling The Stock

The last three months saw significant insider selling at Mammoth Energy Services. In total, CFO & Company Secretary Mark Layton sold US$82k 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

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Mammoth Energy Services insiders own 2.0% of the company, worth about US$2.2m. We consider this fairly low insider ownership.

So What Do The Mammoth Energy Services Insider Transactions Indicate?

An insider sold Mammoth Energy Services shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. When you combine this with the relatively low insider ownership, we are very cautious about the stock. We'd certainly practice some caution before buying! While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For instance, we've identified 4 warning signs for Mammoth Energy Services (2 are a bit unpleasant) you should be aware of.

But note: Mammoth Energy Services 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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