It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Diversified Energy Company PLC’s (LON:DEC) case, it’s fantastic news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
The Last 12 Months Of Insider Transactions At Diversified Energy
The Executive VP, Bradley Gray, made the biggest insider sale in the last 12 months. That single transaction was for UK£239k worth of shares at a price of UK£0.96 each. That means that an insider was selling shares at around the current price of UK£0.92. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. 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. Bradley Gray was the only individual insider to sell over the last year.
In the last twelve months insiders purchased 504.03k shares for UK£449k. But insiders sold 250.00k shares worth UK£239k. Overall, Diversified Energy insiders were net buyers during the last year. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Does Diversified Energy Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Diversified Energy insiders own about UK£30m worth of shares. That equates to 3.4% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Diversified Energy Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Diversified Energy and we see no evidence to suggest they are worried about the 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. Case in point: We’ve spotted 3 warning signs for Diversified Energy you should be aware of, and 2 of them shouldn’t be ignored.
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, but not derivative transactions.
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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.