We wouldn't blame Greenfire Resources Ltd. (NYSE:GFR) shareholders if they were a little worried about the fact that Julian McIntyre, the Independent Chair of the Company Board recently netted about US$157m selling shares at an average price of US$8.04. That diminished their holding by a very significant 100%, which arguably implies a strong desire to reallocate capital.
Greenfire Resources Insider Transactions Over The Last Year
Notably, that recent sale by Julian McIntyre is the biggest insider sale of Greenfire Resources shares that we've seen in the last year. So we know that an insider sold shares at around the present share price of US$7.51. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Over the last year, we can see that insiders have bought 596.39k shares worth US$4.0m. On the other hand they divested 31.53m shares, for US$241m. In total, Greenfire Resources insiders sold more than they bought over the last year. They sold for an average price of about CA$7.64. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. 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!
I will like Greenfire Resources 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.
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. We usually like to see fairly high levels of insider ownership. Greenfire Resources insiders own about US$225m worth of shares (which is 43% of the company). 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 Greenfire Resources Insider Transactions Indicate?
Unfortunately, there has been more insider selling of Greenfire Resources stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Greenfire Resources. For instance, we've identified 3 warning signs for Greenfire Resources (2 are a bit concerning) you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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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