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Whilst it may not be a huge deal, we thought it was good to see that the PHX Minerals Inc. (NYSE:PHX) President, Chad Stephens, recently bought US$92k worth of stock, for US$3.07 per share. Although the purchase is not a big one, increasing their shareholding by only 3.9%, it can be interpreted as a good sign.
The Last 12 Months Of Insider Transactions At PHX Minerals
In fact, the recent purchase by President Chad Stephens was not their only acquisition of PHX Minerals shares this year. They previously made an even bigger purchase of US$93k worth of shares at a price of US$2.30 per share. Even though the purchase was made at a significantly lower price than the recent price (US$3.03), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
While PHX Minerals insiders bought shares during the last year, they didn't sell. You can see the insider transactions (by companies and 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!
PHX Minerals is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Insiders own 16% of PHX Minerals shares, worth about US$17m. 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 Does This Data Suggest About PHX Minerals Insiders?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Insiders likely see value in PHX Minerals shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that PHX Minerals is showing 4 warning signs in our investment analysis, and 1 of those can't be ignored...
But note: PHX Minerals 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.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.