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We often see insiders buying up shares in companies that perform well over the long term. 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 SilverBow Resources, Inc. (NYSE:SBOW).
What Is Insider Selling?
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 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.'
The Last 12 Months Of Insider Transactions At SilverBow Resources
Over the last year, we can see that the biggest insider sale was by the Chairman of the Board, Marcus Rowland, for US$345k worth of shares, at about US$29.01 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$13.75. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Marcus Rowland.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does SilverBow Resources 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. Based on our data, SilverBow Resources insiders have about 1.2% of the stock, worth approximately US$1.9m. I generally like to see higher levels of ownership.
So What Does This Data Suggest About SilverBow Resources Insiders?
It doesn't really mean much that no insider has traded SilverBow Resources shares in the last quarter. Our analysis of SilverBow Resources insider transactions leaves us unenthusiastic. And usually insiders own more stock in the company, according to our data. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for SilverBow Resources.
But note: SilverBow Resources 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.
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 firstname.lastname@example.org. 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.