Insiders who bought Frontier Energy Limited (ASX:FHE) last year must be regretting not buying more as market cap hits AU$53m

By
Simply Wall St
Published
March 10, 2022
ASX:FHE
Source: Shutterstock

Frontier Energy Limited (ASX:FHE) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 22% resulting in a AU$9.5m addition to the company’s market value. As a result, the stock they originally bought for AU$586k is now worth AU$879k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Frontier Energy

Frontier Energy Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when insider Brian Flannery bought AU$406k worth of shares at a price of AU$0.13 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of AU$0.20. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

In the last twelve months insiders purchased 4.51m shares for AU$586k. But insiders sold 107.48k shares worth AU$18k. Overall, Frontier Energy insiders were net buyers during the last year. 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:FHE Insider Trading Volume March 10th 2022

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Insiders at Frontier Energy Have Bought Stock Recently

It's good to see that Frontier Energy insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought AU$586k worth of shares. This is a positive in our book as it implies some confidence.

Insider Ownership of Frontier Energy

Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Frontier Energy insiders own 36% of the company, worth about AU$19m. 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 Frontier Energy Tell Us?

The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Frontier Energy we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 5 warning signs for Frontier Energy you should be aware of, and 4 of these are significant.

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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