We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Core Laboratories N.V. (NYSE:CLB).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Core Laboratories Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Supervisory Director Gregory Barnett for US$116k worth of shares, at about US$40.00 per share. So it's clear an insider wanted to buy, at around the current price, which is US$44.74. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Core Laboratories insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 3200 shares worth US$133k. But they sold 1987 for US$121k. Overall, Core Laboratories insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Core Laboratories is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Core Laboratories Have Bought Stock Recently
Over the last quarter, Core Laboratories insiders have spent a meaningful amount on shares. We can see that Gregory Barnett paid US$116k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Core Laboratories
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Core Laboratories insiders own about US$35m worth of shares. That equates to 1.7% 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.
What Might The Insider Transactions At Core Laboratories Tell Us?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. Insiders likely see value in Core Laboratories shares, given these transactions (along with notable insider ownership of the company). If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.