More Money In The Bank For Greenfire Resources Insiders Who Divested CA$26m

Despite a 10% gain in Greenfire Resources Ltd.'s (NYSE:GFR) stock price this week, shareholders shouldn't let up. In spite of the relatively cheap prices, insiders made the decision to sell CA$26m worth of stock in the last 12 months. This could be a warning indicator of vulnerabilities in the future.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Greenfire Resources

The Last 12 Months Of Insider Transactions At Greenfire Resources

Over the last year, we can see that the biggest insider sale was by the Independent Director, Jonathan Klesch, for US$26m worth of shares, at about US$5.44 per share. That means that an insider was selling shares at slightly below the current price (US$6.85). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was 86% of Jonathan Klesch's stake.

In the last twelve months insiders purchased 286.37k shares for US$1.6m. But they sold 4.76m shares for US$26m. Over the last year we saw more insider selling of Greenfire Resources shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

Greenfire Resources Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Greenfire Resources shares over the last three months. We note insiders cashed in US$26m worth of shares. Meanwhile insiders bought US$1.6m worth , as we said above . Generally this level of net selling might be considered a bit bearish.

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. It's great to see that Greenfire Resources insiders own 46% of the company, worth about US$212m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At Greenfire Resources Tell Us?

The stark truth for Greenfire Resources is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. 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. Be aware that Greenfire Resources is showing 4 warning signs in our investment analysis, and 3 of those are potentially serious...

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.

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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.

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