This Insider Has Just Sold Shares In Energy One Limited (ASX:EOL)

Investors may wish to note that the Non Executive & Non-Independent Director of Energy One Limited, Vaughan Busby, recently netted AU$100k from selling stock, receiving an average price of AU$5.00. On the bright side, that's just a small sale and only reduced their holding by 0.5%.

Check out our latest analysis for Energy One

The Last 12 Months Of Insider Transactions At Energy One

In the last twelve months, the biggest single sale by an insider was when the Non-Independent Director, Ian Ferrier, sold AU$2.0m worth of shares at a price of AU$4.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of AU$4.83. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 6.8% of Ian Ferrier's holding. Notably Ian Ferrier was also the biggest buyer, having purchased AU$1.8m worth of shares.

Over the last year, we can see that insiders have bought 846.97k shares worth AU$1.8m. On the other hand they divested 719.99k shares, for AU$2.9m. 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. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

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Insider Ownership of Energy One

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. Energy One insiders own 58% of the company, currently worth about AU$72m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Energy One Insiders?

Insiders haven't bought Energy One stock in the last three months, but there was some selling. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Energy One makes money, and is growing profits. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 3 warning signs for Energy One that deserve your attention before buying any shares.

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, 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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