When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in Omega Oil & Gas Limited's( ASX:OMA ) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Omega Oil & Gas Insider Transactions Over The Last Year
In fact, the recent purchase by Quentin Flannery was the biggest purchase of Omega Oil & Gas shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at around the current price of AU$0.42. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Omega Oil & Gas insiders decided to buy shares at close to current prices.
While Omega Oil & Gas insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.34. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
See our latest analysis for Omega Oil & Gas
Omega Oil & Gas is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Omega Oil & Gas Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Omega Oil & Gas. We can see that Non-Executive Director Quentin Flannery paid AU$140k for shares in the company. No-one sold. That shows some optimism about the company's future.
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Omega Oil & Gas insiders have about 3.8% of the stock, worth approximately AU$6.7m. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
What Might The Insider Transactions At Omega Oil & Gas Tell Us?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Omega Oil & Gas stock. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 3 warning signs for Omega Oil & Gas (2 are potentially serious!) that we believe deserve your full attention.
Of course Omega Oil & Gas 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.
