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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 Newpark Resources, Inc. (NYSE:NR), you may well want to know whether insiders have been buying or selling.
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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’.
The Last 12 Months Of Insider Transactions At Newpark Resources
Over the last year, we can see that the biggest insider sale was by David Anderson for US$205k worth of shares, at about US$10.26 per share. So what is clear is that an insider saw fit to sell at around the current price of US$9.29. While their view may have changed since the sale, this is not a particularly positive fact. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
All up, insiders sold more shares in Newpark Resources than they bought, over the last year. The sellers received a price of around US$10.39, on average. It’s not too encouraging to see that insiders have sold at below the current price. But we wouldn’t put too much weight on the insider selling. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Have Newpark Resources Insiders Traded Recently?
Over the last three months, we’ve seen a bit of insider buying at Newpark Resources. Director John Minge bought US$10.0k worth of shares in that time. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Does Newpark Resources Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Newpark Resources insiders own about US$24m worth of shares. That equates to 2.9% of the company. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Do The Newpark Resources Insider Transactions Indicate?
We note a that there has been a tad more insider buying than selling, recently. But the net investment is not enough to encourage us much. Still, the insider transactions at Newpark Resources in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Newpark Resources, you should check out this free report on analyst forecasts for the company.
But note: Newpark Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.