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 Apache Corporation (NYSE:APA).
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
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Apache Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Senior VP, Rebecca Hoyt, sold US$290k worth of shares at a price of US$47.49 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$30.41. So it may not shed much light on insider confidence at current levels.
Over the last year, we can see that insiders have bought 17700 shares worth US$691k. On the other hand they divested 22191 shares, for US$992k. Over the last year we saw more insider selling of Apache shares, than buying. The sellers received a price of around US$44.69, on average. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is US$30.41). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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).
Insiders at Apache Have Bought Stock Recently
It's good to see that Apache insiders have made notable investments in the company's shares. Non-Executive Chairman John Lowe spent US$151k on stock, and there wasn't any selling. This makes one think the business has some good points.
Insider Ownership of Apache
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Apache insiders own about US$36m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Apache Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. But we can't say the same for the transactions over the last 12 months. We don't take much heart from transactions by Apache insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in Apache, you should check out this free report on analyst forecasts for the company.
But note: Apache 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.
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