Insiders were net sellers of California Resources Corporation's (NYSE:CRC ) stock during the past year. That is, insiders sold more stock than they bought.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
California Resources Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Mark McFarland, sold US$8.5m worth of shares at a price of US$47.52 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$51.50. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was 57% of Mark McFarland's holding. Mark McFarland was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$1.0m for 21.28k shares. But they sold 235.00k shares for US$11m. Mark McFarland sold a total of 235.00k shares over the year at an average price of US$47.26. You can see a visual depiction of insider transactions (by companies and 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 small cap stocks that are not only being bought by insiders but also have attractive valuations.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.5% of California Resources shares, worth about US$22m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At California Resources Tell Us?
It doesn't really mean much that no insider has traded California Resources shares in the last quarter. Our analysis of California Resources insider transactions leaves us cautious. 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 California Resources. For instance, we've identified 3 warning signs for California Resources (1 shouldn't be ignored) you should be aware of.
Of course California Resources 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.
