Don't Ignore The Fact That This Insider Just Sold Some Shares In Whitehaven Coal Limited (ASX:WHC)

By
Simply Wall St
Published
August 16, 2020
ASX:WHC

We wouldn't blame Whitehaven Coal Limited (ASX:WHC) shareholders if they were a little worried about the fact that Hans Mende, a company insider, recently netted about AU$11m selling shares at an average price of AU$1.33. Probably the most concerning element of the whole transaction is that the disposal amounted to 52% of their entire holding.

View our latest analysis for Whitehaven Coal

Whitehaven Coal Insider Transactions Over The Last Year

Notably, that recent sale by Hans Mende is the biggest insider sale of Whitehaven Coal shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of AU$1.32. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

In the last twelve months insiders purchased 69.43k shares for AU$147k. But insiders sold 9.38m shares worth AU$13m. Over the last year we saw more insider selling of Whitehaven Coal shares, than buying. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
ASX:WHC Insider Trading Volume August 17th 2020

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Whitehaven Coal

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It appears that Whitehaven Coal insiders own 3.0% of the company, worth about AU$40m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Whitehaven Coal Insider Transactions Indicate?

Insiders haven't bought Whitehaven Coal stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Whitehaven Coal. At Simply Wall St, we found 4 warning signs for Whitehaven Coal that deserve your attention before buying any shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, 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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