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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Marksmen Energy Inc. (CVE:MAH).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
The Last 12 Months Of Insider Transactions At Marksmen Energy
In the last twelve months, the biggest single purchase by an insider was when insider Hans Koch bought CA$100k worth of shares at a price of CA$0.05 per share. So it's clear an insider wanted to buy, at around the current price, which is CA$0.05. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months insiders purchased 11.44m shares for CA$523k. But they sold 814.00k shares for CA$35k. Overall, Marksmen Energy insiders were net buyers during the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Marksmen Energy 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.
Marksmen Energy Insiders Bought Stock Recently
We saw some Marksmen Energy insider buying shares in the last three months. They bought CA$77k worth in that time. On the other hand, Chairman Archibald Nesbitt sold CA$28k worth of shares. It is nice to see that insiders have bought, but the quantum isn't large enough to get us excited.
Insider Ownership of Marksmen Energy
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Marksmen Energy insiders own 52% of the company, worth about CA$3.6m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Marksmen Energy Insider Transactions Indicate?
We note a that there has been a bit of insider buying recently (but no selling). Overall the buying isn't worth writing home about. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Marksmen Energy insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Marksmen Energy. Be aware that Marksmen Energy is showing 5 warning signs in our investment analysis, and 3 of those can't be ignored...
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.
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. 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.
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