Trade Alert: Paul Neate At Prominence Energy NL (ASX:PRM), Has Just Spent AU$100k Buying A Small Number of Shares

Whilst it may not be a huge deal, we thought it was good to see that Paul Neate, who is a company insider, recently bought AU$100k worth of stock, for AU$0.007 per share. Although the purchase is not a big one, by either a percentage standpoint or absolute value, it can be seen as a good sign.

Check out our latest analysis for Prominence Energy

The Last 12 Months Of Insider Transactions At Prominence Energy

Notably, that recent purchase by Paul Neate is the biggest insider purchase of Prominence Energy shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of AU$0.008. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Prominence Energy insider decided to buy shares at close to current prices. Paul Neate was the only individual insider to buy during the last year.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

Prominence Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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. Prominence Energy insiders own about AU$1.4m worth of shares. That equates to 21% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Prominence Energy Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Insiders likely see value in Prominence Energy shares, given these transactions (along with notable insider ownership of the company). While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Prominence Energy is showing 4 warning signs in our investment analysis, and 3 of those are significant...

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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