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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Evolution Petroleum Corporation (NYSEMKT:EPM), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Evolution Petroleum Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Randall Keys for US$175k worth of shares, at about US$9.01 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$6.87. So it may not tell us anything about how insiders feel about the current share price. Randall Keys was the only individual insider to sell over the last year.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Evolution Petroleum Have Bought Stock Recently
There was some insider buying at Evolution Petroleum over the last quarter. Independent Director Marran J. Ogilvie shelled out US$46k for shares in that time. It’s good to see the insider buying, as well as the lack of recent sellers. But the amount invested in the last three months isn’t enough for us too put much weight on it, as a single factor.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Evolution Petroleum insiders own 8.5% of the company, worth about US$19m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Evolution Petroleum Insiders?
Insider purchases have outweighed sales, in the last three months. But the net investment is not enough to encourage us much. Still, the insider transactions at Evolution Petroleum in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. 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.
Of course Evolution Petroleum may not be the best stock to buy. So you may wish to see this free collection of high quality 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 firstname.lastname@example.org. 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.