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Insider Buying: The Magnolia Oil & Gas Corporation (NYSE:MGY) President Just Bought US$231k Worth Of Shares

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Simply Wall St
·3 min read
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Potential Magnolia Oil & Gas Corporation (NYSE:MGY) shareholders may wish to note that the President, Stephen Chazen, recently bought US$231k worth of stock, paying US$5.77 for each share. However, it only increased shareholding by a small percentage, and it wasn't a huge purchase by absolute value, either.

View our latest analysis for Magnolia Oil & Gas

Magnolia Oil & Gas Insider Transactions Over The Last Year

Notably, that recent purchase by President Stephen Chazen was not the only time they bought Magnolia Oil & Gas shares this year. They previously made an even bigger purchase of US$1.6m worth of shares at a price of US$8.11 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$6.90). 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. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

While Magnolia Oil & Gas insiders bought shares during the last year, they didn't sell. They paid about US$6.92 on average. This is nice to see since it implies that insiders might see value around current prices. 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!

insider-trading-volume
insider-trading-volume

Magnolia Oil & Gas is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insider Ownership

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 4.2% of Magnolia Oil & Gas shares, worth about US$74m. 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 Does This Data Suggest About Magnolia Oil & Gas Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Magnolia Oil & Gas insiders are well aligned, and that they may think the share price is too low. 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. While conducting our analysis, we found that Magnolia Oil & Gas has 1 warning sign and it would be unwise to ignore it.

Of course Magnolia Oil & Gas 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.