Global Energy Ventures Ltd.'s (ASX:GEV) stock has dropped to AU$0.13, but insiders may have sold too soon at a price of only AU$0.098 a share

By
Simply Wall St
Published
November 21, 2021
ASX:PV1
Source: Shutterstock

Even though Global Energy Ventures Ltd. (ASX:GEV) has fallen by 11% over the past week , insiders who sold AU$322k worth of stock over the past year have had less luck. The average selling price of AU$0.098 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

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.

See our latest analysis for Global Energy Ventures

Global Energy Ventures Insider Transactions Over The Last Year

The insider, Paul Garner, made the biggest insider sale in the last 12 months. That single transaction was for AU$198k worth of shares at a price of AU$0.11 each. That means that even when the share price was below the current price of AU$0.13, an insider wanted to cash in some shares. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 21% of Paul Garner's holding.

Happily, we note that in the last year insiders paid AU$236k for 2.60m shares. But insiders sold 3.30m shares worth AU$322k. Over the last year we saw more insider selling of Global Energy Ventures shares, than buying. They sold for an average price of about AU$0.098. It's not particularly great to see insiders were selling shares at below recent prices. Since insiders sell for many reasons, we wouldn't put too much weight on it. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
ASX:GEV Insider Trading Volume November 21st 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Global Energy Ventures Insiders Are Selling The Stock

The last three months saw significant insider selling at Global Energy Ventures. In total, Non-Executive Chairman Fletcher Brand sold AU$85k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

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. We usually like to see fairly high levels of insider ownership. Global Energy Ventures insiders own about AU$13m worth of shares. That equates to 19% 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 Does This Data Suggest About Global Energy Ventures Insiders?

An insider sold Global Energy Ventures shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We're in no rush to buy! 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. To that end, you should learn about the 7 warning signs we've spotted with Global Energy Ventures (including 2 which don't sit too well with us).

Of course Global Energy Ventures 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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