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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Solaris Oilfield Infrastructure, Inc. (NYSE:SOI), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
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, rules govern insider transactions, and certain disclosures are required.
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’.
Solaris Oilfield Infrastructure Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Independent Director James Burke sold US$120k worth of shares at a price of US$16.67 per share. That means that an insider was selling shares at around the current price of US$16.50. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. James Burke was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 11.00k shares worth US$178k. On the other hand they divested 7.17k shares, for US$120k. In the last twelve months there was more buying than selling by Solaris Oilfield Infrastructure insiders. The average buy price was around US$16.17. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$16.50. You can see the insider transactions (by 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!
I will like Solaris Oilfield Infrastructure better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 1.7% of Solaris Oilfield Infrastructure shares, worth about US$14m. 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 Solaris Oilfield Infrastructure Insider Transactions Indicate?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in Solaris Oilfield Infrastructure and their transactions don’t cause us concern. Of course, the future is what matters most. So if you are interested in Solaris Oilfield Infrastructure, you should check out this free report on analyst forecasts for the company.
Of course Solaris Oilfield Infrastructure may not be the best stock to buy. So you may wish to see this free collection of high quality 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 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.