Hopeful Week For Insiders Who Bought US$1.77m Of Babcock & Wilcox Enterprises Stock

Insiders who bought US$1.77m worth of Babcock & Wilcox Enterprises, Inc. (NYSE:BW) stock in the last year have seen some of their losses recouped as the stock gained 11% last week. The purchase, however, has proven to be a pricey bet, with losses currently totalling US$1.3m.

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.

Check out our latest analysis for Babcock & Wilcox Enterprises

The Last 12 Months Of Insider Transactions At Babcock & Wilcox Enterprises

The insider Bryant Riley made the biggest insider purchase in the last 12 months. That single transaction was for US$578k worth of shares at a price of US$5.83 each. That means that an insider was happy to buy shares at above the current price of US$1.02. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

While Babcock & Wilcox Enterprises insiders bought shares during the last year, they didn't sell. The average buy price was around US$3.57. I'd consider this a positive as it suggests insiders see value at around the current price. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Babcock & Wilcox Enterprises is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Insiders At Babcock & Wilcox Enterprises Have Bought Stock Recently

Over the last quarter, Babcock & Wilcox Enterprises insiders have spent a meaningful amount on shares. In total, insiders bought US$62k worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.

Does Babcock & Wilcox Enterprises Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 5.9% of Babcock & Wilcox Enterprises shares, worth about US$5.4m, according to our data. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!

So What Does This Data Suggest About Babcock & Wilcox Enterprises Insiders?

It is good to see recent purchasing. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Babcock & Wilcox Enterprises insiders are expecting 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. For example, Babcock & Wilcox Enterprises has 3 warning signs (and 2 which are a bit concerning) we think you should know about.

But note: Babcock & Wilcox Enterprises 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.