Is Sanchez Energy Corporation (SN) Soaring Insider Trading Sending a Signal?

The exact reason why investors have been taking down Sanchez Energy Corporation (NYSE:SN) stock at a frenetic pace might seem like a bit of a head-scratcher at the moment, but that’s only if you are buying the stock for the wrong reasons. On 22 October, the shares dropped -0.03 points or -1.35 percent at $2.2 with a light trade volume of 2.369 million shares. After opening the session at $2.22, the shares went as high as $2.24 and as low as $2.1, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $191 million and now has 87 million shares outstanding. Sanchez Energy Corporation (SN) stock has lost -14.73 percent of market value in 21 trading days.

SN stock has a trailing 3-year beta of 1.58, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was -$4.53 a share in the trailing twelve months. The stock’s value has fallen -58.57 percent year to date (YTD) against a decline of -45.27 percent in 12 month’s time. The company’s shares still trade -64.46 percent away from its 1-year high of $6.19 and 1.38 percent up from 52-week low of $2.17. The average consensus rating on the company is 3.1, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a hold.

Sanchez Energy Corporation (SN) will probably climb 48.64 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $5.25 as a high price target. This represents a whopping 138.64 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $3.25, which represents a return potential of 47.73 percent when compared to the closing price of the stock of $2.2 on Monday, October 22. The lowest price target for the stock is $1 — slightly more than -54.55 percent from SN’s current share price.

History has shown that shares in Sanchez Energy Corporation have gone up on 14 different earnings reaction days and are predicted to add 0.06 percent when the company reports upcoming earnings.

Let’s take a look at some insider activity at Sanchez Energy Corporation (NYSE:SN) and see the pattern. The earliest insider trade took place on 10/15/2018. Thill Howard J Sr parted with a total of 21.88 thousand shares of company at average share price of $2.46. The total for the sales was set at $53.82 thousand. After this transaction, the Executive VP and CFO account balance stood at 348.37 thousand shares. The stock lost -10.57 percent since that insider sale. On 08/02/2018, Hink Kirsten A, SVP and CAO, sold 8.49 thousand shares at a price per share of $4.41. This removed 37.42 thousand shares from the insider’s fortune and the stock saw a -50.11 percent retreat in value since the news became public. This transaction left 142.15 thousand shares in the SVP and CAO account.

On 06/04/2018, Director Jackson Alan G. performed a sale transaction worth $39.57 thousand. This sale at $3.95 each has eliminated 10.02 thousand shares from the insider’s portfolio position. Meanwhile, shares have recorded -44.3 percent decrease since the transaction was reported. The insider now is left with 143.05 thousand shares remaining in the account. Nelson Robert V. Iii, who performs the Director job, sold 10.02 thousand shares for $39.47 thousand. The disposal occurred on 06/04/2018 was priced at $3.94 per share. The share price plunged -44.16 percent since the reporting date. Nelson Robert V. Iii now left with a stake of 91.28 thousand SN stock worth $200.82 thousand after the insider selling.

The stock is currently hovering around the first support level of $2.12. Below this, the next support is placed in the zone of $2.04. Till the time, the SN stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 35.48 on daily chart, which may remain a cause for comfort. If the price breaks below $2.04 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $2.26 mark may result into a pull-back move towards $2.32 level.

Further, it is sporting a 0.2 on the Price-to-Sales ratio. Compare this with the industry average P/S of 95.78. 44.7 percent is the gross profit margin for Sanchez Energy Corporation and operating margin sits at 24.8 percent. Along with this, the net profit margin is -13.9 percent.