California Resources Insider Lowered Holding By 57% During Last Year

Viewing insider transactions for California Resources Corporation's (NYSE:CRC ) over the last year, we see that insiders were net sellers. This means that a larger number of shares were sold by insiders in relation to shares purchased.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for California Resources

The Last 12 Months Of Insider Transactions At California Resources

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Mark McFarland, sold US$8.5m worth of shares at a price of US$47.52 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$51.17. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower 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. This single sale was 57% of Mark McFarland's stake. The only individual insider seller over the last year was Mark McFarland.

Happily, we note that in the last year insiders paid US$1.0m for 21.28k shares. But insiders sold 235.00k shares worth US$11m. Mark McFarland divested 235.00k shares over the last 12 months at an average price of US$47.26. You can see the insider transactions (by companies and 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 are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that California Resources insiders own 0.5% of the company, worth about US$22m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About California Resources Insiders?

The fact that there have been no California Resources insider transactions recently certainly doesn't bother us. Our analysis of California Resources insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that California Resources is showing 3 warning signs in our investment analysis, and 1 of those is a bit concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.