We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Hallador Energy Company (NASDAQ:HNRG).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, including certain disclosures.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Hallador Energy
Over the last year, we can see that the biggest insider purchase was by Director Charles Wesley for US$50k worth of shares, at about US$6.02 per share. That means that an insider was happy to buy shares at above the current price. It’s very possible they regret the purchase, but it’s more likely they are bullish about the company. It’s not at all bad to see insiders buy shares at or above current prices. Charles Wesley was the only buyer over the year.
The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Hallador Energy insiders own about US$13m worth of shares. That equates to 7.4% of the company. This level of insider ownership is good but just short of being particularly stand-out, but it certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Hallador Energy Insiders?
It’s certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Hallador Energy insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Hallador Energy.
Of course Hallador Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.