This Insider Has Just Sold Shares In Civitas Resources, Inc. (NYSE:CIVI)

By
Simply Wall St
Published
January 20, 2022
NYSE:CIVI
Source: Shutterstock

We'd be surprised if Civitas Resources, Inc. (NYSE:CIVI) shareholders haven't noticed that an insider, Paul Keglevic, recently sold US$203k worth of stock at US$56.94 per share. That sale was 45% of their holding, so it does make us raise an eyebrow.

See our latest analysis for Civitas Resources

The Last 12 Months Of Insider Transactions At Civitas Resources

Notably, that recent sale by insider Paul Keglevic was not the only time they sold Civitas Resources shares this year. They previously made an even bigger sale of -US$437k worth of shares at a price of US$42.78 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$55.27. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was 56% of Paul Keglevic's holding.

In the last year Civitas Resources insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:CIVI Insider Trading Volume January 20th 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Civitas Resources insiders own about US$19m worth of shares. That equates to 0.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Civitas Resources Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Civitas Resources is profitable and growing, we're not too worried by this. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. 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. For instance, we've identified 4 warning signs for Civitas Resources (1 is concerning) you should be aware of.

But note: Civitas Resources 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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