Insider Spends AU$231k Buying More Shares In Kinetiko Energy

Potential Kinetiko Energy Limited (ASX:KKO) shareholders may wish to note that the Non-Executive Director, Donald Mzolisa Ncube, recently bought AU$231k worth of stock, paying AU$0.06 for each share. Although the purchase only increased their holding by 1.6%, it is still a solid purchase in our view.

See our latest analysis for Kinetiko Energy

Kinetiko Energy Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Brendan Gore bought AU$709k worth of shares at a price of AU$0.083 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.062). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. 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.

While Kinetiko Energy insiders bought shares during the last year, they didn't sell. Their average price was about AU$0.072. I'd consider this a positive as it suggests insiders see value at around the current price. 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!

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

Does Kinetiko Energy Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Kinetiko Energy insiders own 54% of the company, currently worth about AU$45m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Kinetiko Energy Insider Transactions Indicate?

The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Kinetiko Energy insiders are well aligned, and quite possibly think the share price is too low. Looks promising! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example, Kinetiko Energy has 4 warning signs (and 3 which don't sit too well with us) we think you should know about.

Of course Kinetiko 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.

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