How Much Are Enegex Limited (ASX:ENX) Insiders Taking Off The Table?

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Enegex Limited (ASX:ENX).

Do Insider Transactions Matter?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.

We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.

See our latest analysis for Enegex

The Last 12 Months Of Insider Transactions At Enegex

Over the last year, we can see that the biggest insider sale was by the insider, Graeme Kirke, for AU$115k worth of shares, at about AU$0.032 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$0.055. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was 88% of Graeme Kirke's stake.

Happily, we note that in the last year insiders paid AU$5.9k for 583.11k shares. On the other hand they divested 4.62m shares, for AU$162k. In total, Enegex insiders sold more than they bought over the last year. The average sell price was around AU$0.035. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Enegex better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Have Enegex Insiders Traded Recently?

We've only seen a tiny insider purchase valued at AU$847, in the last three months. Overall, we don't think these recent trades are particularly informative, one way or the other.

Does Enegex Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Enegex insiders own about AU$2.1m worth of shares. That equates to 28% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The Enegex Insider Transactions Indicate?

Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. Our analysis of Enegex insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. 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. At Simply Wall St, we've found that Enegex has 4 warning signs (3 are a bit unpleasant!) that deserve your attention before going any further with your analysis.

Of course Enegex 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, but not derivative transactions.

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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. 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.
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