The fact that multiple Murphy USA Inc. (NYSE:MUSA) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Murphy USA
Over the last year, we can see that the biggest insider sale was by the Independent Non-Executive Chairman, Robert Murphy, for US$8.6m worth of shares, at about US$515 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$407). So it is hard to draw any strong conclusion from it.
All up, insiders sold more shares in Murphy USA than they bought, over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for Murphy USA
I will like Murphy USA better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.
Insiders At Murphy USA Have Bought Stock Recently
It's good to see that Murphy USA insiders have made notable investments in the company's shares. We can see that Independent Director David Haley paid US$436k for shares in the company. No-one sold. This makes one think the business has some good points.
Insider Ownership
Many investors like to check how much of a company is owned by 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 Murphy USA insiders own 9.4% of the company, worth about US$741m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Murphy USA Insider Transactions Indicate?
It's certainly positive to see the recent insider purchase. However, the longer term transactions are not so encouraging. The recent buying by an insider , along with high insider ownership, suggest that Murphy USA insiders are fairly aligned, and optimistic. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 1 warning sign with Murphy USA and understanding this should be part of your investment process.
But note: Murphy USA 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 of direct interests only, but not derivative transactions or indirect interests.
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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.