Possible Signal As Boss Energy Insiders Sell AU$26m In Stock

Despite the fact that Boss Energy Limited (ASX:BOE) stock rose 13% last week, insiders who sold AU$26m worth of stock in the previous 12 months are likely to be better off. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of AU$5.65, which is higher than the current price, may have been the best decision.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Boss Energy

Boss Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the CEO, MD & Director, Duncan Craib, for AU$21m worth of shares, at about AU$5.65 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is AU$2.89. So it may not shed much light on insider confidence at current levels.

All up, insiders sold more shares in Boss Energy than they bought, over the last year. 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!

I will like Boss Energy better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Boss Energy Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 3.0% of Boss Energy shares, worth about AU$36m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Boss Energy Insiders?

It doesn't really mean much that no insider has traded Boss Energy shares in the last quarter. Our analysis of Boss Energy insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Boss Energy. Case in point: We've spotted 3 warning signs for Boss Energy you should be aware of, and 2 of these are potentially serious.

But note: Boss Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.

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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.