Weatherford International Insiders Sell US$20m Of Stock, Possibly Signalling Caution

Many Weatherford International plc (NASDAQ:WFRD) insiders ditched their stock over the past year, which may be of interest to the company's shareholders. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

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 Weatherford International

Weatherford International Insider Transactions Over The Last Year

The President, Girishchandra Saligram, made the biggest insider sale in the last 12 months. That single transaction was for US$6.2m worth of shares at a price of US$105 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$76.09. So it may not tell us anything about how insiders feel about the current share price.

Insiders in Weatherford International didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Weatherford International Have Sold Stock Recently

The last quarter saw substantial insider selling of Weatherford International shares. Specifically, Senior VP & Chief Accounting Officer Desmond Mills ditched US$522k 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

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Weatherford International insiders own about US$104m worth of shares (which is 1.9% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Weatherford International Insiders?

An insider sold Weatherford International shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. But since Weatherford International is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. While it's good to be aware of 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. You'd be interested to know, that we found 2 warning signs for Weatherford International and we suggest you have a look.

Of course Weatherford International may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.