Even though Patterson-UTI Energy, Inc. (NASDAQ:PTEN) has fallen by 11% over the past week , insiders who sold US$2.4m worth of stock over the past year have had less luck. Insiders would probably have been better off holding on to their shares given that the average selling price of US$8.58 is still lower than the current share price.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Patterson-UTI Energy
Over the last year, we can see that the biggest insider sale was by the Independent Vice Chairman of the Board, Robert Drummond, for US$2.0m worth of shares, at about US$8.89 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$5.75). So it is hard to draw any strong conclusion from it.
Over the last year we saw more insider selling of Patterson-UTI Energy shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
View our latest analysis for Patterson-UTI Energy
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Patterson-UTI Energy Insiders Are Selling The Stock
The last three months saw some Patterson-UTI Energy insider selling. Independent Director James Stewart only netted US$33k selling shares, in that period. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 1.9% of Patterson-UTI Energy shares, worth about US$44m. 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 Does This Data Suggest About Patterson-UTI Energy Insiders?
We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. We're a little cautious about the insider selling at Patterson-UTI Energy. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Patterson-UTI Energy. While conducting our analysis, we found that Patterson-UTI Energy has 3 warning signs and it would be unwise to ignore these.
Of course Patterson-UTI Energy 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 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.