Even if it's not a huge purchase, we think it was good to see that Matthew Miller, the Co-Chairman of the Board of Granite Ridge Resources, Inc. (NYSE:GRNT) recently shelled out US$95k to buy stock, at US$5.21 per share. Although the purchase is not a big one, increasing their shareholding by only 1.4%, it can be interpreted as a good sign.

Granite Ridge Resources Insider Transactions Over The Last Year

In fact, the recent purchase by Co-Chairman of the Board Matthew Miller was not their only acquisition of Granite Ridge Resources shares this year. They previously made an even bigger purchase of US$102k worth of shares at a price of US$5.98 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$5.16). 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. 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.

While Granite Ridge Resources insiders bought shares during the last year, they didn't sell. The average buy price was around US$5.34. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Granite Ridge Resources insiders own about US$23m worth of shares. That equates to 3.4% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Granite Ridge Resources Insider Transactions Indicate?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Granite Ridge Resources shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company.

Of course Granite Ridge 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.

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.