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It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Brookside Energy Limited (ASX:BRK), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Brookside Energy Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Mark Casey bought AU$851k worth of shares at a price of AU$0.017 per share. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices.
Happily, we note that in the last year insiders bought 51.27m shares for a total of AU$861k. In the last twelve months there was more buying than selling by Brookside Energy insiders. They paid about AU$0.017 on average. I’d consider this a positive as it suggests insiders see value at around the current price, which is AU$0.011. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Are Brookside Energy Insiders Buying Or Selling?
Over the last three months, we’ve seen a bit of insider buying at Brookside Energy. Non Executive Chairman Michael Fry shelled out AU$11k for shares in that time. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Does Brookside Energy Boast High 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Brookside Energy insiders own 25% of the company, worth about AU$2.8m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Brookside Energy Insiders?
Our data shows a little more insider buying than selling in the last three months. But overall the difference isn’t worth writing home about. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Brookside Energy and we see no evidence to suggest they are worried about the future. I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow for free .
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.