【what binocular magnification is best for hunting】Need To Know: Sanchez Energy Corporation (NYSE:SN) Insiders Have Been Selling Shares

It is what binocular magnification is best for huntingnot 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 we’ll take a look at whether insiders have been buying or selling shares in

Sanchez Energy Corporation

(

NYSE:SN

).

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 don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’

Check out our latest analysis for Sanchez Energy

The Last 12 Months Of Insider Transactions At Sanchez Energy

In the last twelve months, the biggest single sale by an insider was when Howard Thill sold US$260k worth of shares at a price of US$3.89 per share. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$0.26. So it may not tell us anything about how insiders feel about the current share price.

Over the last year, we note insiders sold 96.92k shares worth US$380k. In total, Sanchez Energy insiders sold more than they bought over the last year. The average sell price was around US$3.92. It is certainly not great to see that insiders have sold shares in the company. However, we do note that the average sale price was significantly higher than the current share price (which is US$0.26). You can see a visual depiction of insider transactions 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!

NYSE:SN Insider Trading January 2nd 19

If you are like me, then you will

not

want to miss this

free

list of growing companies that insiders are buying.

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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Sanchez Energy insiders own 8.1% of the company, currently worth about US$1.7m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

Story continues

So What Does This Data Suggest About Sanchez Energy Insiders?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. The insider transactions at Sanchez Energy are not inspiring us to buy. 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 Sanchez Energy

.

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

[email protected]

.

View comments