Earths Energy Insiders Still AU$222k Away From Original Investment Value

Insiders who bought AU$692.6k worth of Earths Energy Limited (ASX:EE1) stock in the last year have seen some of their losses recouped as the stock gained 10.0% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$222k since the time of purchase.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Earths Energy

The Last 12 Months Of Insider Transactions At Earths Energy

The insider Jason Peterson made the biggest insider purchase in the last 12 months. That single transaction was for AU$194k worth of shares at a price of AU$0.02 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.011). 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. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months Earths Energy insiders were buying shares, but not selling. The average buy price was around AU$0.016. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

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. It's great to see that Earths Energy insiders own 50% of the company, worth about AU$3.7m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Earths Energy Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Earths Energy shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Earths 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 Earths Energy. For instance, we've identified 4 warning signs for Earths Energy (3 are potentially serious) you should be aware of.

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 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.