Don't Ignore The Insider Selling In Hallador Energy

We wouldn't blame Hallador Energy Company (NASDAQ:HNRG) shareholders if they were a little worried about the fact that David Hardie, the Independent Director recently netted about US$579k selling shares at an average price of US$19.05. That's a big disposal, and it decreased their holding size by 18%, which is notable but not too bad.

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Hallador Energy Insider Transactions Over The Last Year

In fact, the recent sale by David Hardie was the biggest sale of Hallador Energy shares made by an insider individual in the last twelve months, according to our records. So what is clear is that an insider saw fit to sell at around the current price of US$17.45. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Happily, we note that in the last year insiders paid US$635k for 87.00k shares. But they sold 30.38k shares for US$579k. Overall, Hallador Energy insiders were net buyers during the last year. The average buy price was around US$7.30. 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. 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 Hallador 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).

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Hallador Energy insiders own about US$57m worth of shares. That equates to 7.0% of the company. 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 Does This Data Suggest About Hallador Energy Insiders?

Unfortunately, there has been more insider selling of Hallador Energy stock, than buying, in the last three months. But we take heart from prior transactions. And insiders do own shares. So we're not overly bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 3 warning signs for Hallador Energy (of which 1 is a bit concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity 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.