Bullish ENRG Elements Insiders Loaded Up On AU$1.28m Of Stock

Quite a few insiders have dramatically grown their holdings in ENRG Elements Limited (ASX:EEL) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

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ENRG Elements Insider Transactions Over The Last Year

The Non-Executive Chairman Jiandong He made the biggest insider purchase in the last 12 months. That single transaction was for AU$979k worth of shares at a price of AU$0.002 each. That means that an insider was happy to buy shares at above the current price of AU$0.0015. 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. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Over the last year, we can see that insiders have bought 783.36m shares worth AU$1.3m. But they sold 140.00m shares for AU$280k. In total, ENRG Elements insiders bought more than they sold over the last year. They paid about AU$0.0016 on average. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for ENRG Elements

ENRG Elements is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders At ENRG Elements Have Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at ENRG Elements. Non-Executive Chairman Jiandong He purchased AU$20k worth of shares in that period. It's good to see the insider buying, as well as the lack of recent sellers. However, in this case the amount invested recently is quite small.

Insider Ownership Of ENRG Elements

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. ENRG Elements insiders own about AU$3.2m worth of shares (which is 41% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About ENRG Elements Insiders?

Our data shows a little insider buying, but no selling, in the last three months. The net investment is not enough to encourage us much. On a brighter note, the transactions over the last year are encouraging. With high insider ownership and encouraging transactions, it seems like ENRG Elements insiders think the business has merit. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ENRG Elements. While conducting our analysis, we found that ENRG Elements has 5 warning signs and it would be unwise to ignore them.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 of direct interests only, but not derivative transactions or indirect interests.

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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.