Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Kinetiko Energy Limited (ASX:KKO), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Kinetiko Energy
Kinetiko Energy Insider Transactions Over The Last Year
The Executive Chairman Adam Sierakowski-Dutton made the biggest insider purchase in the last 12 months. That single transaction was for AU$343k worth of shares at a price of AU$0.075 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.098), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Kinetiko 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. By clicking on the graph below, you can see the precise details of each insider transaction!
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 Kinetiko Energy Boast High 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 26% of Kinetiko Energy shares, worth about AU$19m. 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 Kinetiko Energy Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Kinetiko Energy and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Kinetiko Energy is showing 5 warning signs in our investment analysis, and 2 of those shouldn't be ignored...