Surge Energy Inc. (TSE:SGY) Insiders Increased Their Holdings
We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Surge Energy Inc. (TSE:SGY), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Colombia 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’.
View our latest analysis for Surge Energy
Surge Energy Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when President Paul Colborne bought CA$148k worth of shares at a price of CA$2.72 per share. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 935.93k shares worth CA$2.1m. But insiders sold 22.81k shares worth CA$51k. Overall, Surge Energy insiders were net buyers last year. They paid about CA$2.20 on average. This is nice to see since it implies that insiders might see value around current prices (around CA$1.48). You can see the insider transactions over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Surge Energy Insiders Bought Stock Recently
At Surge Energy,over the last quarter, we have observed quite a lot more insider buying than insider selling. Insiders spent CA$515k on shares. On the other hand, Controller Rod Monden netted CA$13k by selling. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Insider Ownership of Surge Energy
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Surge Energy insiders own about CA$16m worth of shares (which is 3.7% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Surge Energy Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Surge Energy shares, given these transactions (along with notable insider ownership of the company). Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Surge Energy.
Of course Surge Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 editorial-team@simplywallst.com.
