Insider Purchases Worth AU$1.28m See Losses As Calima Energy Market Value Drops To AU$5.1m

Insiders who bought AU$1.28m worth of Calima Energy Limited's (ASX:CE1) stock at an average buy price of AU$0.016 over the last year may be disappointed by the recent 11% decrease in the stock. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth AU$621.4k, which is not great.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Calima Energy

The Last 12 Months Of Insider Transactions At Calima Energy

The insider Jay Hughes made the biggest insider purchase in the last 12 months. That single transaction was for AU$400k worth of shares at a price of AU$0.007 each. We do like to see buying, but this purchase was made at well below the current price of AU$0.008. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

Over the last year, we can see that insiders have bought 77.68m shares worth AU$1.3m. But insiders sold 500.00k shares worth AU$55k. In total, Calima Energy insiders bought more than they sold over the last year. Their average price was about AU$0.016. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Calima Energy is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Calima Energy Have Bought Stock Recently

It's good to see that Calima Energy insiders have made notable investments in the company's shares. Overall, three insiders shelled out AU$618k for shares in the company -- and none sold. This makes one think the business has some good points.

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. We usually like to see fairly high levels of insider ownership. Calima Energy insiders own about AU$1.3m worth of shares. That equates to 27% 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 Do The Calima Energy Insider Transactions Indicate?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Calima Energy shares, given these transactions (along with notable insider ownership of the company). So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 5 warning signs for Calima Energy you should be aware of, and 4 of these are a bit concerning.

Of course Calima Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com