We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Granite Oil Corp. (TSE:GXO).
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 on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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.’
Granite Oil Insider Transactions Over The Last Year
Founder & Director Martin Cheyne made the biggest insider sale in the last 12 months. That single transaction was for CA$203k worth of shares at a price of CA$2.95 each. That is hardly a positive sign, even though it took place above the latest price (CA$0.60). So it may not shed much light on insider confidence at current levels. Martin Cheyne was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid CA$203k for 68.90k shares. On the other hand they divested 68.90k shares, for CA$203k. Overall, Granite Oil insiders were net buyers last year. Their average price was about CA$2.95. These transactions suggest that insiders have considered the current price of CA$0.60 attractive. You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Granite Oil better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Granite Oil insiders own 11% of the company, currently worth about CA$2.7m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Granite Oil Insider Transactions Indicate?
The fact that there have been no Granite Oil insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Granite Oil insiders are doubting the company. Of course, the future is what matters most. So if you are interested in Granite Oil, you should check out this free report on analyst forecasts for the company.
Of course Granite Oil may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.