Yahoo Finance Read This Before Buying Parex Resources Inc. (TSE:PXT) Shares
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 Parex Resources Inc. (TSE:PXT), 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 in the 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 it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.
Check out our latest analysis for Parex Resources
Parex Resources Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Independent Director, Ronald Miller, sold CA$5.5m worth of shares at a price of CA$21.89 per share. So what is clear is that an insider saw fit to sell at around the current price of CA$19.16. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Over the last year, we can see that insiders have bought 10790 shares worth CA$182k. But they sold 918913 for CA$20m. All up, insiders sold more shares in Parex Resources than they bought, over the last year. 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!
I will like Parex Resources better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Parex Resources Insiders Are Selling The Stock
There was substantially more insider selling, than buying, of Parex Resources shares over the last three months. In total, insiders sold US$19m worth of shares in that time. On the flip side, Director Carmen Sylvain spent US$5.9k on purchasing shares. Generally this level of net selling might be considered a bit bearish.
Insider Ownership of Parex Resources
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Parex Resources insiders own 2.2% of the company, worth about CA$62m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Parex Resources Insider Transactions Indicate?
The stark truth for Parex Resources is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. 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 Parex Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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 editorial-team@simplywallst.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.
