A number of insiders bought Exterran Corporation (NYSE:EXTN) stock last year, which is great news for shareholders
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Exterran Corporation (NYSE:EXTN), it sends a favourable message to the company's shareholders.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
View our latest analysis for Exterran
Exterran Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when President Andrew Way bought US$94k worth of shares at a price of US$4.70 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$3.18). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
While Exterran insiders bought shares during the last year, they didn't sell. The average buy price was around US$4.21. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company 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. Based on our data, Exterran insiders have about 3.7% of the stock, worth approximately US$4.0m. I generally like to see higher levels of ownership.
So What Do The Exterran Insider Transactions Indicate?
The fact that there have been no Exterran insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Exterran insiders bought more shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Exterran. Be aware that Exterran is showing 2 warning signs in our investment analysis, and 1 of those makes us a bit uncomfortable...
Of course Exterran 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 currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
