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Those following along with Transocean Ltd. (NYSE:RIG) will no doubt be intrigued by the recent purchase of shares by Frederik Mohn, Independent Director of the company, who spent a stonking US$21m on stock at an average price of US$4.18. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 15%.
Transocean Insider Transactions Over The Last Year
In fact, the recent purchase by Frederik Mohn was the biggest purchase of Transocean shares made by an insider individual in the last twelve months, according to our records. That implies that an insider found the current price of US$4.20 per share to be enticing. 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. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Transocean share holders is that an insider was buying at near the current price. Frederik Mohn was the only individual insider to buy during the last year.
Frederik Mohn bought 7.90m shares over the last 12 months at an average price of US$4.10. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Transocean Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. Transocean insiders own 6.7% of the company, currently worth about US$174m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Transocean Tell Us?
It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Transocean. Looks promising! 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. For instance, we've identified 3 warning signs for Transocean (1 is concerning) you should be aware of.
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