- Oops!Something went wrong.Please try again later.
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Parsley Energy, Inc. (NYSE:PE), you may well want to know whether insiders have been buying or selling.
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, 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. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Parsley Energy Insider Transactions Over The Last Year
The Founder & Executive Chairman, Bryan Sheffield, made the biggest insider sale in the last 12 months. That single transaction was for US$70m worth of shares at a price of US$28.15 each. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of US$17.99. So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders purchased 16178 shares for US$332k. On the other hand they divested 3.0m shares, for US$79m. All up, insiders sold more shares in Parsley Energy than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Parsley Energy better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Parsley Energy Have Sold Stock Recently
There was substantially more insider selling, than buying, of Parsley Energy shares over the last three months. In that time, Bryan Sheffield dumped US$2.0m worth of shares. Meanwhile Independent Director Jerry Windlinger bought US$35k worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the shares are not cheap.
Does Parsley Energy Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Parsley Energy insiders own 4.1% of the company, currently worth about US$231m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Parsley Energy Tell Us?
The insider sales have outweighed the insider buying, at Parsley Energy, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Parsley Energy makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. Of course, the future is what matters most. So if you are interested in Parsley Energy, you should check out this free report on analyst forecasts for the company.
Of course Parsley Energy 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 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.