In the last year, multiple insiders have substantially increased their holdings of Botala Energy Limited (ASX:BTE) stock, indicating that insiders’ optimism about the company’s prospects has increased.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
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Over the last year, we can see that the biggest insider purchase was by Executive Chairman Wolf Martinick for AU$970k worth of shares, at about AU$0.068 per share. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.065). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Botala Energy insiders may have bought shares in the last year, but they didn’t sell any. 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!
View our latest analysis for Botala 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).
There was some insider buying at Botala Energy over the last quarter. Executive Chairman Wolf Martinick purchased AU$8.7k worth of shares in that period. It’s great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Botala Energy insiders own 40% of the company, currently worth about AU$7.3m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.