Have Energy One Insiders Been Selling Stock?

Some Energy One Limited (ASX:EOL) shareholders may be a little concerned to see that the Independent Non-Executive Director, Ian Ferrier, recently sold a substantial AU$5.4m worth of stock at a price of AU$16.50 per share. That's a big disposal, and it decreased their holding size by 13%, which is notable but not too bad.

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Energy One Insider Transactions Over The Last Year

In fact, the recent sale by Independent Non-Executive Director Ian Ferrier was not their only sale of Energy One shares this year. Earlier in the year, they fetched AU$14.20 per share in a -AU$28m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$17.42. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 44% of Ian Ferrier's stake.

All up, insiders sold more shares in Energy One than they bought, over 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!

Check out our latest analysis for Energy One

I will like Energy One better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does Energy One Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It appears that Energy One insiders own 24% of the company, worth about AU$130m. 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 Energy One Insider Transactions Indicate?

Insiders haven't bought Energy One stock in the last three months, but there was some selling. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, Energy One makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For example - Energy One has 1 warning sign we think you should be aware of.

But note: Energy One may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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.