Insiders Give Up US$180k As WhiteHawk Stock Drops To AU$0.0025

Insiders who acquired US$230.2k worth of WhiteHawk Limited's (ASX:WHK) stock at an average price of US$0.011 in the past 12 months may be dismayed by the recent 17% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$50.0k, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At WhiteHawk

In the last twelve months, the biggest single purchase by an insider was when Non-Executive Chair Giuseppe Porcelli bought AU$230k worth of shares at a price of AU$0.011 per share. That means that an insider was happy to buy shares at above the current price of AU$0.0025. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock when an insider has bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price. Giuseppe Porcelli was the only individual insider to buy during the last year.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

See our latest analysis for WhiteHawk

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).

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that WhiteHawk insiders own 15% of the company, worth about AU$631k. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Do The WhiteHawk Insider Transactions Indicate?

It doesn't really mean much that no insider has traded WhiteHawk shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don't see anything to make us think WhiteHawk insiders are doubting the company, and they do own shares. While it's good to be aware of 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. Be aware that WhiteHawk is showing 5 warning signs in our investment analysis, and 4 of those are a bit unpleasant...

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 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.