Trade Alert: Senior VP Of Texas Pacific Land Micheal Dobbs Has Sold Stock

We wouldn't blame Texas Pacific Land Corporation (NYSE:TPL) shareholders if they were a little worried about the fact that Micheal Dobbs, the Senior VP recently netted about US$1.5m selling shares at an average price of US$1,272. That's a big disposal, and it decreased their holding size by 45%, which is notable but not too bad.

Check out our latest analysis for Texas Pacific Land

Texas Pacific Land Insider Transactions Over The Last Year

In fact, the recent sale by Micheal Dobbs was the biggest sale of Texas Pacific Land shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to take some cash off the table, even below the current price of US$1,385. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 45% of Micheal Dobbs's stake.

In the last twelve months insiders purchased 576.00 shares for US$623k. But insiders sold 1.99k shares worth US$2.6m. Over the last year we saw more insider selling of Texas Pacific Land shares, than buying. The sellers received a price of around US$1,296, on average. We don't gain confidence from insider selling below the recent share price. Since insiders sell for many reasons, we wouldn't put too much weight on it. 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!

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).

Insider Ownership Of Texas Pacific Land

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.2% of Texas Pacific Land shares, worth about US$55m. 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 Do The Texas Pacific Land Insider Transactions Indicate?

The stark truth for Texas Pacific Land is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Texas Pacific Land 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. 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 Texas Pacific Land (of which 1 is a bit unpleasant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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 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.