Read This Before Selling Transocean Ltd. (NYSE:RIG) Shares
Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!
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 shareholders might well want to know whether insiders have been buying or selling shares in Transocean Ltd. (NYSE:RIG).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
View our latest analysis for Transocean
Transocean Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Frederik Mohn bought US$19m worth of shares at a price of US$9.30 per share. So it’s clear an insider wanted to buy, even at a higher price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.
Over the last year, we can see that insiders have bought 2.02m shares worth US$19m. But they sold 65.51k for US$467k. In total, Transocean insiders bought more than they sold over the last year. The average buy price was around US$9.29. This is nice to see since it implies that insiders might see value around current prices (around US$8.73). You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Transocean 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 Transocean Have Sold Stock Recently
We’ve seen more insider selling than insider buying at Transocean recently. We note Executive VP Howard Davis cashed in US$467k worth of shares. On the other hand we note Independent Director Vanessa C. Chang bought US$63k worth of shares. Because the selling vastly outweighs the buying, we’d say this is a somewhat bearish sign.
Insider Ownership of Transocean
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Transocean insiders own about US$302m worth of shares (which is 5.7% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Transocean Insiders?
The stark truth for Transocean is that there has been more insider selling than insider buying in the last three months. In contrast, they appear keener if you look at the last twelve months. On top of that, insiders own a significant portion of the company. So we’re happy to look past recent trading. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Transocean.
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 editorial-team@simplywallst.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.
