Some Targa Resources Corp. (NYSE:TRGP) shareholders may be a little concerned to see that the President of Logistics & Transportation, D. Pryor, recently sold a substantial US$2.3m worth of stock at a price of US$113 per share. That's a big disposal, and it decreased their holding size by 10%, which is notable but not too bad.
Targa Resources Insider Transactions Over The Last Year
The Independent Director, Joe Perkins, made the biggest insider sale in the last 12 months. That single transaction was for US$7.7m worth of shares at a price of US$97.67 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$118. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 18% of Joe Perkins's holding.
Targa Resources insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that Targa Resources insiders own 1.6% of the company, worth about US$421m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Targa Resources Insiders?
Insiders haven't bought Targa Resources stock in the last three months, but there was some selling. And even if we look at the last year, we didn't see any purchases. On the plus side, Targa Resources makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. While conducting our analysis, we found that Targa Resources has 3 warning signs and it would be unwise to ignore them.
Of course Targa Resources may not be the best stock to buy. So you may wish to see this free collection of high quality 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.