Don't Ignore The Insider Selling In Kosmos Energy

We wouldn't blame Kosmos Energy Ltd. (NYSE:KOS) shareholders if they were a little worried about the fact that Andrew Inglis, the Chairman & CEO recently netted about US$865k selling shares at an average price of US$3.11. However, that sale only accounted for 7.5% of their holding, so arguably it doesn't say much about their conviction.

See our latest analysis for Kosmos Energy

Kosmos Energy Insider Transactions Over The Last Year

In fact, the recent sale by Andrew Inglis was the biggest sale of Kosmos Energy shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of US$3.00. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

In the last year Kosmos Energy insiders didn't buy any company stock. 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!

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Does Kosmos Energy Boast High 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 Kosmos Energy insiders own 2.5% of the company, worth about US$37m. 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 Kosmos Energy Insiders?

Insiders sold Kosmos Energy shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. But since Kosmos Energy is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! 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. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Kosmos Energy.

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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.