Baker Hughes Company (NYSE:BKR) shareholders (or potential shareholders) will be happy to see that the Chairman & CEO, Lorenzo Simonelli, recently bought a whopping US$1.0m worth of stock, at a price of US$14.12. Not only is that a big swing, but it increased their holding size by 33%, which is definitely great to see.
The Last 12 Months Of Insider Transactions At Baker Hughes
In fact, the recent purchase by Lorenzo Simonelli was the biggest purchase of Baker Hughes shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than US$14.11 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. To us, it's very important to consider the price insiders pay for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 105.90k shares for US$1.6m. On the other hand they divested 9.20k shares, for US$208k. In the last twelve months there was more buying than selling by Baker Hughes insiders. Their average price was about US$15.57. These transactions suggest that insiders have considered the current 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!
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).
Insider Ownership of Baker Hughes
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. Baker Hughes insiders own about US$20m worth of shares. That equates to 0.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Baker Hughes Insiders?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Baker Hughes we think they are probably pretty confident of a bright future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Baker Hughes. At Simply Wall St, we found 2 warning signs for Baker Hughes that deserve your attention before buying any shares.
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, but not derivative transactions.
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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