We wouldn't blame Karoon Energy Ltd (ASX:KAR) shareholders if they were a little worried about the fact that Mark Smith, the Exploration Director & Executive Director recently netted about AU$1.1m selling shares at an average price of AU$0.99. That's a big dump, and it decreased their holding size by 35%, which is notable but not too bad.
Karoon Energy Insider Transactions Over The Last Year
Notably, that recent sale by Mark Smith is the biggest insider sale of Karoon Energy shares that we've seen in the last year. That means that an insider was selling shares at slightly below the current price (AU$1.07). 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 35%of Mark Smith's holding.
Over the last year, we can see that insiders have bought 35000 shares worth AU$46k. But insiders sold 1063240 shares worth AU$1.1m. You can see the insider transactions (by 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!
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Insider Ownership of Karoon Energy
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Karoon Energy insiders own 5.5% of the company, worth about AU$26m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Karoon Energy Insiders?
The insider sales have outweighed the insider buying, at Karoon Energy, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd think twice before buying! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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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, but not derivative transactions.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.