Yahoo Finance Need To Know: Woodside Petroleum Ltd (ASX:WPL) Insiders Have Been Selling Shares
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 Woodside Petroleum Ltd (ASX:WPL).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
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Woodside Petroleum Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when CEO, MD & Executive Director Peter Coleman sold AU$2.2m worth of shares at a price of AU$28.79 per share. That means that an insider was selling shares at slightly below the current price (AU$33.66). While their view may have changed since they sold, this isn’t a particularly bullish sign. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 14.2% of Peter Coleman’s stake. Peter Coleman was the only individual insider to sell shares in the last twelve months. Notably Peter Coleman was also the biggest buyer, having purchased AU$1.5m worth of shares.
In the last twelve months insiders purchased 55.49k shares for AU$1.5m. But they sold 76.89k for AU$2.2m. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Woodside Petroleum better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Woodside Petroleum Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Woodside Petroleum insiders own 0.2% of the company, worth about AU$62m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Woodside Petroleum Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. We don’t take much encouragement from the transactions by Woodside Petroleum insiders. But we do like the fact that insiders own a fair chunk of the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
