Several Bloom Energy Insiders Sell Shares Sending Potential Negative Signal

Simply Wall St · 07/22/2024 12:34

Bloom Energy Corporation (NYSE:BE) shareholders might have a reason to worry after multiple insiders sold their shares over the last year. When evaluating insider transactions, knowing whether insiders are buying is usually more beneficial than knowing whether they are selling, as the latter can be open to many interpretations. However, if numerous insiders are selling, shareholders should investigate more.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for Bloom Energy

Bloom Energy Insider Transactions Over The Last Year

The Independent Director, Eddie Zervigon, made the biggest insider sale in the last 12 months. That single transaction was for US$362k worth of shares at a price of US$12.86 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$14.18. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 26% of Eddie Zervigon's stake.

In the last year Bloom Energy insiders didn't buy any company stock. 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!

insider-trading-volume
NYSE:BE Insider Trading Volume July 22nd 2024

I will like Bloom Energy better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Bloom Energy Have Sold Stock Recently

The last quarter saw substantial insider selling of Bloom Energy shares. Specifically, insiders ditched US$391k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership Of Bloom Energy

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. Bloom Energy insiders own about US$90m worth of shares. That equates to 2.8% 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 Bloom Energy Tell Us?

Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! 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. While conducting our analysis, we found that Bloom Energy has 3 warning signs and it would be unwise to ignore them.

Of course Bloom 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 of direct interests only, but not derivative transactions or indirect interests.