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Schlumberger Limited's (NYSE:SLB)) market cap declines to US$64b but insiders who sold US$23m stock were able to hedge their losses

Insiders seem to have made the most of their holdings by selling US$23m worth of Schlumberger Limited (NYSE:SLB) stock at an average sell price of US$54.52 during the past year. After the stock price dropped 12% last week, the company's market value declined by US$9.0b, but insiders were able to mitigate their losses.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Schlumberger

Schlumberger Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Vice President of Core Services & Equipment, Abdellah Merad, for US$4.0m worth of shares, at about US$57.20 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$44.68. So it may not shed much light on insider confidence at current levels.

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Insiders in Schlumberger didn't buy any shares in the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
insider-trading-volume

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Schlumberger Insiders Are Selling The Stock

The last three months saw significant insider selling at Schlumberger. Specifically, insiders ditched US$15m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

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 Schlumberger insiders own 0.2% of the company, worth about US$143m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Schlumberger Insider Transactions Indicate?

Insiders haven't bought Schlumberger 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. But since Schlumberger is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Schlumberger. You'd be interested to know, that we found 3 warning signs for Schlumberger and we suggest you have a look.

But note: Schlumberger may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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