Oil Insider Activity
Here at Oil Patch Research, we believe its important that the investor stay abreast of insider trading activity for any oil stocks they are considering. While executive trading activity is not a foolproof window into the future direction of your favorite oil investment, it is a metric one should monitor with diligence. For example, one of the oil stocks we have covered at Oil Patch Research is Cano Petroleum (CFW). One of the reasons we think this oil investment is a potental “gem” is the high degree of insider activity. And what is notable is who is buying and how much of the total stock they own. You can also do searches on individual oil stocks to examine insider buying trends
1. Monitor the Oil Stocks you Own
In managing your oil stock portfolio, look at insider transactions. If you note insider buying, it could suggest that there is some very positive sentiment inside the company. That may influence whether you wish to add to your positions within your oil stock portfolio.
2. Monitor who is Buying Oil Stocks
Looking at the Cano Petroleum example, their CEO and CFO have been buying shares with regularity since the 4th quarter of 2008. This is more relevant than a director. If a director is buying very large quantities of their own oil stock, that may also be a meaningful development.
3. Monitor How Much is Acquired
It important to note how many shares are acquired, the value of those shares and if the transaction is on the open market. In some cases, oil companies will award their leaders stock in the form of options. As an oil investor, what you are looking for are transactions where large blocks of common shares are acquired on the open market. You also want to understand the total value of the shares acquired. Basically, you want to answer how much “skin” the executive have in the game. It is also noteworthy to evaluate how large a total percentage stake the individual has in his company.
4. Using Insider Buying to Discover Oil Stocks for Investment
The filtering process to find stocks that you do not already own with high insider buying is daunting if it could not be automated. Fortunately there are free services that do an excellent job in sifting through all of the SEC data. Using such tools, you can analyze your own favorite oil stocks and others.
Insider buying is not the only metric you should consider in purchasing oil stock. Performing fundamental research and making sure a potential investment conforms to your investment risk and reward strategy should be teh overriding principle in selecting oil stock winners.
As you perform research for your favorite oil stocks, take an opportunity to utilize this Oil Patch Research Tool courtesy of InsiderCow. Please click on the link provided.