We wouldn't blame Patterson-UTI Energy, Inc. (NASDAQ:PTEN) shareholders if they were a little worried about the fact that Robert Drummond, the Independent Vice Chairman of the Board recently netted about US$4.6m selling shares at an average price of US$12.04. That's a big disposal, and it decreased their holding size by 26%, which is notable but not too bad.

The Last 12 Months Of Insider Transactions At Patterson-UTI Energy

In fact, the recent sale by Robert Drummond was the biggest sale of Patterson-UTI Energy shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was slightly below the current price of US$12.06, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 26% of Robert Drummond's holding.

Patterson-UTI Energy insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

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Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Patterson-UTI Energy insiders own about US$104m worth of shares (which is 2.3% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Patterson-UTI Energy Tell Us?

Insiders sold Patterson-UTI Energy shares recently, but they didn't buy any. And even if we look at the last year, we didn't see any purchases. It is good to see high insider ownership, but the insider selling leaves us cautious. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Patterson-UTI Energy.

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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.