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Investors who take an interest in Magnolia Oil & Gas Corporation (NYSE:MGY) should definitely note that the President, Stephen Chazen, recently paid US$5.92 per share to buy US$296k worth of the stock. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.
Magnolia Oil & Gas Insider Transactions Over The Last Year
Notably, that recent purchase by President Stephen Chazen was not the only time they bought Magnolia Oil & Gas shares this year. Earlier in the year, they paid US$8.11 per share in a US$1.6m purchase. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$5.49). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Magnolia Oil & Gas insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
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. It appears that Magnolia Oil & Gas insiders own 4.2% of the company, worth about US$58m. 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 Do The Magnolia Oil & Gas Insider Transactions Indicate?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Magnolia Oil & Gas shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Magnolia Oil & Gas. At Simply Wall St, we found 1 warning sign for Magnolia Oil & Gas that deserve your attention before buying any shares.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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. 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.
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