AFC Energy Insiders Up UK£145k On UK£382.8k Investment

AFC Energy plc (LON:AFC) insiders who acquired shares over the previous 12 months, can probably afford to ignore the recent 26% decline in the stock price. After accounting for the recent loss, the UK£382.8k worth of shares they purchased is now worth UK£528.2k, suggesting a good return on their investment.

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.

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The Last 12 Months Of Insider Transactions At AFC Energy

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chairman Gary Bullard bought UK£63k worth of shares at a price of UK£0.067 per share. We do like to see buying, but this purchase was made at well below the current price of UK£0.11. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months AFC Energy insiders were buying shares, but not selling. The average buy price was around UK£0.079. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Check out our latest analysis for AFC Energy

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

Insiders At AFC Energy Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at AFC Energy. Overall, three insiders shelled out UK£126k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.

Insider Ownership Of AFC Energy

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. From looking at our data, insiders own UK£882k worth of AFC Energy stock, about 0.9% of the company. I generally like to see higher levels of ownership.

So What Do The AFC Energy Insider Transactions Indicate?

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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on AFC Energy stock. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AFC Energy. Every company has risks, and we've spotted 3 warning signs for AFC Energy (of which 2 are a bit unpleasant!) you should know about.

But note: AFC Energy 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.