Shareholders Can't Ignore US$946k Of Sales By SM Energy Insiders

Despite the fact that SM Energy Company (NYSE:SM) stock rose 13% last week, insiders who sold US$946k worth of stock in the previous 12 months are likely to be better off. Selling at an average price of US$46.06, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At SM Energy

The Independent Director, Rose Robeson, made the biggest insider sale in the last 12 months. That single transaction was for US$455k worth of shares at a price of US$45.50 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$27.13. So it may not shed much light on insider confidence at current levels.

Over the last year, we can see that insiders have bought 14.50k shares worth US$440k. But insiders sold 20.55k shares worth US$946k. Over the last year we saw more insider selling of SM Energy 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!

Check out our latest analysis for SM Energy

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).

Insiders At SM Energy Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at SM Energy. President Herbert Vogel shelled out US$21k for shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Does SM Energy Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that SM Energy insiders own 1.5% of the company, worth about US$47m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The SM Energy Insider Transactions Indicate?

We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. Our analysis of SM Energy 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. For instance, we've identified 4 warning signs for SM Energy (2 make us uncomfortable) you should be aware of.

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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.