Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Texas Pacific Land Corporation (NYSE:TPL), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Texas Pacific Land
In the last twelve months, the biggest single sale by an insider was when the insider, Dana McGinnis, sold US$1.3m worth of shares at a price of US$1,270 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$1,822. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 48% of Dana McGinnis's stake. Dana McGinnis was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$1.7m for 1.28k shares. But insiders sold 1.00k shares worth US$1.3m. In the last twelve months there was more buying than selling by Texas Pacific Land insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Texas Pacific Land Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Texas Pacific Land. We can see that Independent Trustee Murray Stahl paid US$474k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Texas Pacific Land insiders own about US$22m worth of shares. That equates to 0.2% of the company. 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 Texas Pacific Land Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Given that insiders also own a fair bit of Texas Pacific Land we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Texas Pacific Land, you should check out this free report on analyst forecasts for the company.
Of course Texas Pacific Land may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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. 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.
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