Possible bearish signals as Pioneer Natural Resources Company (NYSE:PXD) insiders disposed of US$22m worth of stock

By
Simply Wall St
Published
February 16, 2022
NYSE:PXD
Source: Shutterstock

The fact that multiple Pioneer Natural Resources Company (NYSE:PXD) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Pioneer Natural Resources

The Last 12 Months Of Insider Transactions At Pioneer Natural Resources

In the last twelve months, the biggest single sale by an insider was when the Independent Director, Matthew Gallagher, sold US$18m worth of shares at a price of US$158 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$219. 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. 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 just 42% of Matthew Gallagher's stake.

In total, Pioneer Natural Resources insiders sold more than they bought over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:PXD Insider Trading Volume February 16th 2022

I will like Pioneer Natural Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Pioneer Natural Resources insiders own 0.7% of the company, currently worth about US$362m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Pioneer Natural Resources Insiders?

It doesn't really mean much that no insider has traded Pioneer Natural Resources shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Pioneer Natural Resources insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 1 warning sign for Pioneer Natural Resources and we suggest you have a look.

Of course Pioneer Natural Resources 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, but not derivative transactions.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.