Insider Purchases Worth AU$10.3m See Losses As Tlou Energy Market Value Drops To AU$28m

The recent price decline of 10.0% in Tlou Energy Limited's (ASX:TOU) stock may have disappointed insiders who bought AU$10.3m worth of shares at an average price of AU$0.035 in the past 12 months. This is not good as insiders invest based on expectations that their money will appreciate over time. However, as a result of recent losses, their original investment is now worth only AU$7.92m.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Tlou Energy

Tlou Energy Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider purchase was by insider Ian Campbell for AU$5.0m worth of shares, at about AU$0.035 per share. That means that an insider was happy to buy shares at above the current price of AU$0.027. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Tlou Energy insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership Of Tlou Energy

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Tlou Energy insiders own 44% of the company, worth about AU$12m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Tlou Energy Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Tlou Energy insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tlou Energy. When we did our research, we found 5 warning signs for Tlou Energy (4 make us uncomfortable!) that we believe deserve your full attention.

Of course Tlou 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.