Are Insiders Buying Galilee Energy Limited (ASX:GLL) Stock?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Galilee Energy Limited (ASX:GLL), you may well want to know whether insiders have been buying or selling.

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

See our latest analysis for Galilee Energy

The Last 12 Months Of Insider Transactions At Galilee Energy

In the last twelve months, the biggest single purchase by an insider was when insider Stephen Copulos bought AU$2.5m worth of shares at a price of AU$0.95 per share. That means that an insider was happy to buy shares at above the current price of AU$0.69. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. We note that Stephen Copulos was both the biggest buyer and the biggest seller.

Over the last year, we can see that insiders have bought 2.84m shares worth AU$2.5m. But insiders sold 3.09m shares worth AU$1.8m. Overall, Galilee Energy insiders were net buyers during 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Galilee Energy Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Galilee Energy. In that time, insider Stephen Copulos dumped AU$1.7m worth of shares. Meanwhile Independent Non-Executive Director Stephen Kelemen bought AU$9.9k worth. Since the selling really does outweigh the buying, we'd say that these transactions may suggest that some insiders feel the company has been fully valued in recent months.

Does Galilee Energy Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. 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 10% of Galilee Energy shares, worth about AU$21m. 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 Galilee Energy Insider Transactions Indicate?

Unfortunately, there has been more insider selling of Galilee Energy stock, than buying, in the last three months. On the other hand, the insider transactions over the last year are encouraging. And insiders do own shares. So we're happy enough to look past some selling. 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 Galilee Energy has 5 warning signs (2 can't be ignored!) that deserve your attention before going any further with your analysis.

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, 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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