We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in ONE Gas, Inc. (NYSE:OGS).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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'.
The Last 12 Months Of Insider Transactions At ONE Gas
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman of the Board John Gibson for US$248k worth of shares, at about US$73.42 per share. That implies that an insider found the current price of US$76.44 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for ONE Gas share holders is that insiders were buying at near the current price.
In the last twelve months insiders purchased 6.40k shares for US$490k. But insiders sold 1.57k shares worth US$114k. In total, ONE Gas insiders bought more than they sold over the last year. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
ONE Gas Insiders Are Selling The Stock
The last three months saw some ONE Gas insider selling. The selling netted US$60k for Lead Independent Director Eduardo Rodriguez. But US$28k was spent on buying, too, . While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of ONE Gas
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 ONE Gas insiders own 1.8% of the company, worth about US$72m. 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 ONE Gas Insider Transactions Indicate?
Insider selling has just outweighed insider buying in the last three months. But the difference is small, and thus, not concerning. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in ONE Gas and their transactions don't cause us concern. 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. Be aware that ONE Gas is showing 3 warning signs in our investment analysis, and 1 of those is potentially serious...
But note: ONE Gas 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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This article by Simply Wall St is general in nature. 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.
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