Whitebark Energy Insider Confidence Rewarded, Stock Hits AU$3.1m Market Cap

Whitebark Energy Limited (ASX:WBE) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 14%, resulting in a AU$385k rise in the company's market capitalisation, translating to a gain of 107% on their initial investment. Put another way, the original AU$231.3k acquisition is now worth AU$479.4k.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Whitebark Energy

The Last 12 Months Of Insider Transactions At Whitebark Energy

In the last twelve months, the biggest single purchase by an insider was when insider Niv Dagan bought AU$189k worth of shares at a price of AU$0.02 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.016). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when an insider has purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. The only individual insider to buy over the last year was Niv Dagan.

Niv Dagan bought 29.96m shares over the last 12 months at an average price of AU$0.0077. 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!

Whitebark 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 Of Whitebark Energy

Many investors like to check how much of a company is owned by 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 37% of Whitebark Energy shares, worth about AU$1.1m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Whitebark Energy Tell Us?

It is good to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Whitebark Energy insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To help with this, we've discovered 5 warning signs (4 are potentially serious!) that you ought to be aware of before buying any shares in Whitebark Energy.

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 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.