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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Mammoth Energy Services, Inc. (NASDAQ:TUSK).
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Mammoth Energy Services Insider Transactions Over The Last Year
CEO & Director Arty Straehla made the biggest insider sale in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$27.29 each. So we know that an insider sold shares at around the present share price of US$23.70. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
In the last twelve months insiders netted US$1.3m for 50.35k shares sold. In total, Mammoth Energy Services insiders sold more than they bought over the last year. The average sell price was around US$26.43. It’s not particularly great to see insiders were selling shares around current prices. Since insiders sell for many reasons, we wouldn’t put too much weight on it. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Mammoth Energy Services better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Mammoth Energy Services Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Mammoth Energy Services. In total, Director Arthur Smith dumped US$149k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
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. Our data suggests Mammoth Energy Services insiders own 0.4% of the company, worth about US$3.9m. We consider this fairly low insider ownership.
What Might The Insider Transactions At Mammoth Energy Services Tell Us?
An insider hasn’t bought Mammoth Energy Services stock in the last three months, but there was some selling. And even if we look to the last year, we didn’t see any purchases. But it is good to see that Mammoth Energy Services is growing earnings. When you consider that most companies have higher levels of insider ownership, we’re a little wary. So we’re not rushing to buy, to say the least. Of course, the future is what matters most. So if you are interested in Mammoth Energy Services, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.