Omega Oil & Gas Insider Buyers See Boost After Market Cap Rose AU$59m

Omega Oil & Gas Limited (ASX:OMA) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 16% resulting in a AU$59m addition to the company’s market value. As a result, the stock they originally bought for AU$761.9k is now worth AU$958.0k.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

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The Last 12 Months Of Insider Transactions At Omega Oil & Gas

Over the last year, we can see that the biggest insider purchase was by Non-Executive Director Quentin Flannery for AU$471k worth of shares, at about AU$0.84 per share. That means that even when the share price was higher than AU$0.78 (the recent price), an insider wanted to purchase shares. 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. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.

Over the last year, we can see that insiders have bought 1.23m shares worth AU$762k. But they sold 97.01k shares for AU$77k. In total, Omega Oil & Gas insiders bought more than they sold over the last year. Their average price was about AU$0.62. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Omega Oil & Gas

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Omega Oil & Gas Insiders Are Selling The Stock

The last three months saw some Omega Oil & Gas insider selling. Independent Lead Non-Executive Director Andrew Hackwood sold just AU$29k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the volume sold is so low that it really doesn't bother us.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Omega Oil & Gas insiders own about AU$17m worth of shares. That equates to 4.0% of the company. 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 Do The Omega Oil & Gas Insider Transactions Indicate?

We did not see any insider buying in the last three months, but we did see selling. But the sales were small, so we're not concerned. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Omega Oil & Gas and their transactions don't cause us concern. 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. To that end, you should learn about the 4 warning signs we've spotted with Omega Oil & Gas (including 2 which are a bit unpleasant).

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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