Don't Ignore The Insider Selling In Natural Gas Services Group

Anyone interested in Natural Gas Services Group, Inc. (NYSE:NGS) should probably be aware that the Chairman, Stephen Taylor, recently divested US$272k worth of shares in the company, at an average price of US$27.15 each. However, the silver lining is that the sale only reduced their total holding by 2.1%, so we're hesitant to read anything much into it, on its own.

See our latest analysis for Natural Gas Services Group

Natural Gas Services Group Insider Transactions Over The Last Year

Notably, that recent sale by Stephen Taylor is the biggest insider sale of Natural Gas Services Group shares that we've seen in the last year. That means that an insider was selling shares at around the current price of US$25.44. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Stephen Taylor sold a total of 13.18k shares over the year at an average price of US$25.91. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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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 appears that Natural Gas Services Group insiders own 5.2% of the company, worth about US$17m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Natural Gas Services Group Tell Us?

An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Natural Gas Services Group makes money, and is growing profits. 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. Every company has risks, and we've spotted 2 warning signs for Natural Gas Services Group you should know about.

Of course Natural Gas Services Group 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.