With Enea Up 12%, Insider Buyers Count Their Returns

Last week, Enea AB (publ) (STO:ENEA) insiders, who had purchased shares in the previous 12 months were rewarded handsomely. The shares increased by 12% last week, resulting in a kr189m increase in the company's market worth, implying a 90% gain on their initial purchase. Put another way, the original kr3.19m acquisition is now worth kr6.07m.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Enea

The Last 12 Months Of Insider Transactions At Enea

Over the last year, we can see that the biggest insider purchase was by Acting President Anders Lidbeck for kr2.0m worth of shares, at about kr45.40 per share. Even though the purchase was made at a significantly lower price than the recent price (kr84.60), we still think insider buying is a positive. 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 insiders purchased 71.70k shares for kr3.2m. But they sold 44.70k shares for kr2.0m. In the last twelve months there was more buying than selling by Enea insiders. 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!

Enea is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insider Ownership

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. It appears that Enea insiders own 38% of the company, worth about kr654m. 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 Enea Insider Transactions Indicate?

The fact that there have been no Enea insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Enea insiders feel good about the company's future. 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 1 warning sign for Enea that deserve your attention before buying any shares.

But note: Enea 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.

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.

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