Shareholders might want to keep a close eye on Terna Energy Societe Anonyme Commercial Technical Company (ATH:TENERGY) after insiders sold €111m stock earlier this year

By
Simply Wall St
Published
November 23, 2021
ATSE:TENERGY
Source: Shutterstock

While it’s been a great week for Terna Energy Societe Anonyme Commercial Technical Company (ATH:TENERGY) shareholders after stock gained 5.3%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell €111m worth of stock in the past 12 months. This could be a sign of impending weakness.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Terna Energy Societe Anonyme Commercial Technical

Terna Energy Societe Anonyme Commercial Technical Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman of the Board, Goergios Peristeris, for €46m worth of shares, at about €13.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of €14.00. 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 17% of Goergios Peristeris's holding. Goergios Peristeris was the only individual insider to sell shares in the last twelve months. Notably Goergios Peristeris was also the biggest buyer, having purchased €627k worth of shares.

Goergios Peristeris sold a total of 8.68m shares over the year at an average price of €12.82. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
ATSE:TENERGY Insider Trading Volume November 24th 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Terna Energy Societe Anonyme Commercial Technical

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. Terna Energy Societe Anonyme Commercial Technical insiders own about €266m worth of shares (which is 16% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About Terna Energy Societe Anonyme Commercial Technical Insiders?

It doesn't really mean much that no insider has traded Terna Energy Societe Anonyme Commercial Technical shares in the last quarter. While we feel good about high insider ownership of Terna Energy Societe Anonyme Commercial Technical, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for Terna Energy Societe Anonyme Commercial Technical you should be aware of, and 1 of these makes us a bit uncomfortable.

But note: Terna Energy Societe Anonyme Commercial Technical 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.

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.

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