Insiders Could Have Profited By Holding onto Vital Energy Shares Despite 17% Drop

Despite the fact that Vital Energy, Inc.'s (NYSE:VTLE) value has dropped 17% in the last week insiders who sold US$951k worth of stock in the past 12 months have had less success. Given that the average selling price of US$24.49 is still lower than the current share price, insiders would probably have been better off keeping their shares.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Vital Energy Insider Transactions Over The Last Year

The Executive VP & CFO, Bryan Lemmerman, made the biggest insider sale in the last 12 months. That single transaction was for US$285k worth of shares at a price of US$28.54 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$13.46. So it is hard to draw any strong conclusion from it.

Over the last year, we can see that insiders have bought 7.50k shares worth US$183k. But insiders sold 38.82k shares worth US$951k. In total, Vital Energy insiders sold more than they bought over the last year. The average sell price was around US$24.49. We are not joyful about insider selling. However, we do note that the average sale price was significantly higher than the current share price (which is US$13.46). 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 Vital Energy

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Insiders At Vital Energy Have Sold Stock Recently

There was substantially more insider selling, than buying, of Vital Energy shares over the last three months. In that time, insiders dumped US$449k worth of shares. On the flip side, insider Richard Campbell spent US$89k on purchasing shares. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Insider Ownership Of Vital Energy

For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that Vital Energy insiders own 23% of the company, worth about US$126m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About Vital Energy Insiders?

Unfortunately, there has been more insider selling of Vital Energy stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Vital Energy you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.