Insider Spends CA$1.3m Buying More Shares In Advantage Energy

Those following along with Advantage Energy Ltd. (TSE:AAV) will no doubt be intrigued by the recent purchase of shares by Daniel Farb, Independent Director of the company, who spent a stonking CA$1.3m on stock at an average price of CA$10.43. That increased their holding by a full 53%, which arguably implies the sort of confidence required for a shy sweet-natured nerd to ask the most popular kid in the school to go out on a date.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

The Last 12 Months Of Insider Transactions At Advantage Energy

In fact, the recent purchase by Daniel Farb was the biggest purchase of Advantage Energy shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is CA$10.63. Of course they may have changed their mind. But this suggests they are optimistic. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Advantage Energy share holders is that insiders were buying at near the current price.

Happily, we note that in the last year insiders paid CA$4.8m for 527.43k shares. But insiders sold 4.50k shares worth CA$41k. Overall, Advantage Energy insiders were net buyers during the last year. The average buy price was around CA$9.09. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. 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!

See our latest analysis for Advantage Energy

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).

Does Advantage Energy Boast High Insider Ownership?

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Advantage Energy insiders own 3.1% of the company, worth about CA$53m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Advantage Energy Tell Us?

It's certainly positive to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Advantage 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. When we did our research, we found 2 warning signs for Advantage Energy (1 is potentially serious!) that we believe deserve your full attention.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.