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.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Diversified Energy
Diversified Energy Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Co-Founder Robert Hutson for UK£257k worth of shares, at about UK£1.03 per share. So it's clear an insider wanted to buy, at around the current price, which is UK£1.10. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
In the last twelve months Diversified Energy insiders were buying shares, but not selling. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Diversified Energy is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of Diversified Energy
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Diversified Energy insiders own about UK£31m worth of shares. That equates to 3.3% 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.
So What Does This Data Suggest About Diversified Energy Insiders?
The fact that there have been no Diversified Energy insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Diversified Energy and we see no evidence to suggest they are worried about the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for Diversified Energy (of which 1 is a bit unpleasant!) you should know about.
Of course Diversified Energy may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.