Patterson-UTI Energy, Inc.'s (NASDAQ:PTEN) stock rose 11% last week, but insiders who sold US$4.7m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of US$9.68, which is higher than the current price, may have been the wisest decision for these insiders as their investment would have been worth less now than when they sold.

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.

Patterson-UTI Energy Insider Transactions Over The Last Year

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. So what is clear is that an insider saw fit to sell at around the current price of US$8.41. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. 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.

All up, insiders sold more shares in Patterson-UTI Energy than they bought, over the last year. 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 Patterson-UTI Energy 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.

Patterson-UTI Energy Insiders Are Selling The Stock

There was substantially more insider selling, than buying, of Patterson-UTI Energy shares over the last three months. We note insiders cashed in US$2.4m worth of shares. On the flip side, President William Hendricks spent US$197k on purchasing shares (as mentioned above) . Generally this level of net selling might be considered a bit bearish.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Patterson-UTI Energy insiders own about US$59m worth of shares. That equates to 1.8% of the company. 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 Patterson-UTI Energy Tell Us?

Unfortunately, there has been more insider selling of Patterson-UTI Energy stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 2 warning signs for Patterson-UTI Energy you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.