Despite Recent Gains, Australian Oil Insiders Are Still Down AU$52k

Insiders who bought AU$245.3k worth of Australian Oil Company Limited (ASX:AOK) stock in the last year have seen some of their losses recouped as the stock gained 20% last week. However, total losses seen by insiders are still AU$52k since the time of purchase.

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 Australian Oil

The Last 12 Months Of Insider Transactions At Australian Oil

The insider Leo Love made the biggest insider purchase in the last 12 months. That single transaction was for AU$174k worth of shares at a price of AU$0.0041 each. That means that an insider was happy to buy shares at above the current price of AU$0.003. 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. We always take careful note of the price insiders pay when purchasing 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.

In the last twelve months insiders purchased 64.31m shares for AU$245k. But insiders sold 9.86m shares worth AU$42k. In the last twelve months there was more buying than selling by Australian Oil insiders. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Australian Oil Have Bought Stock Recently

Over the last quarter, Australian Oil insiders have spent a meaningful amount on shares. We can see that insider Leo Love paid AU$174k for shares in the company. No-one sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of Australian Oil

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. Australian Oil insiders own about AU$1.0m worth of shares. That equates to 34% of the company. 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 Australian Oil Insiders?

The recent insider purchase is heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Australian Oil insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Australian Oil is showing 4 warning signs in our investment analysis, and 3 of those are a bit unpleasant...

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.

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.

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.