ConocoPhillips (NYSE:COP) insiders sold US$4.6m worth of stock, a possible red flag that's yet to materialize
Despite a 5.5% gain in ConocoPhillips' (NYSE:COP) stock price this week, shareholders shouldn't let up. The fact that insiders chose to dispose of US$4.6m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.
While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for ConocoPhillips
ConocoPhillips Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Director & Advisor, Timothy Leach, sold US$4.2m worth of shares at a price of US$102 per share. That means that even when the share price was below the current price of US$124, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was only 5.7% of Timothy Leach's holding.
In the last year ConocoPhillips insiders didn't buy any company stock. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
ConocoPhillips Insiders Are Selling The Stock
The last three months saw significant insider selling at ConocoPhillips. In total, Independent Director Jody Freeman sold US$244k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
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. It's great to see that ConocoPhillips insiders own 0.09% of the company, worth about US$149m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At ConocoPhillips Tell Us?
An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that ConocoPhillips is growing earnings. It is good to see high insider ownership, but the insider selling leaves us cautious. 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. Every company has risks, and we've spotted 3 warning signs for ConocoPhillips (of which 1 is a bit unpleasant!) you should know about.
Of course ConocoPhillips 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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