It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Gulf Keystone Petroleum Limited (LON:GKP).

What Is Insider Buying?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.

We don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

See our latest analysis for Gulf Keystone Petroleum

Gulf Keystone Petroleum Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by CEO & Director Jon Harris for UK£51k worth of shares, at about UK£1.71 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£1.59). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 50.20k shares for UK£87k. But insiders sold 10.23k shares worth UK£20k. Overall, Gulf Keystone Petroleum insiders were net buyers during the last year. 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!

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.

Have Gulf Keystone Petroleum Insiders Traded Recently?

In the last quarter there were insider sales totalling UK£20k. But that was only a smidgen more than the UK£20k worth of buying. The net selling is so small that it's hard to draw any conclusions from these recent transactions.