Stock Analysis

Are Insiders Buying Talos Energy Inc. (NYSE:TALO) Stock?

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NYSE:TALO
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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Talos Energy Inc. (NYSE:TALO).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Talos Energy

Talos Energy Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when Executive VP & Head of Operations Robert Abendschein bought US$417k worth of shares at a price of US$8.34 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$14.23. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NYSE:TALO Insider Trading Volume March 15th 2021

Talos Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership of Talos Energy

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 0.5% of Talos Energy shares, worth about US$5.9m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Talos Energy Insiders?

It doesn't really mean much that no insider has traded Talos Energy shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. While we have no worries about the insider transactions, we'd be more comfortable if they owned more Talos Energy stock. While we like knowing 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. Every company has risks, and we've spotted 2 warning signs for Talos Energy you should know about.

But note: Talos Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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What are the risks and opportunities for Talos Energy?

Talos Energy Inc., an independent exploration and production company, focuses on the exploration and production of oil and natural gas properties in the United States Gulf of Mexico and offshore Mexico.

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Rewards

  • Trading at 77.1% below our estimate of its fair value

  • Earnings are forecast to grow 16.3% per year

  • Became profitable this year

Risks

  • Has a high level of debt

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Share Price

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1Y Return

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