Insiders' AU$1.10m Investments In Red Following Tlou Energy's AU$3.9m Dip In Market Value

Simply Wall St · 10/16 22:57

Insiders who bought AU$1.10m worth of Tlou Energy Limited's (ASX:TOU) stock at an average buy price of AU$0.035 over the last year may be disappointed by the recent 10.0% decrease in the stock. 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 AU$850.2k, which is not what they expected.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Tlou Energy

Tlou Energy Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO, MD & Director Anthony Gilby bought AU$560k worth of shares at a price of AU$0.035 per share. That means that an insider was happy to buy shares at above the current price of AU$0.027. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

Tlou 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!

insider-trading-volume
ASX:TOU Insider Trading Volume October 16th 2024

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).

Insiders At Tlou Energy Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Tlou Energy. In total, insiders bought AU$429k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Insider Ownership

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 37% of Tlou Energy shares, worth about AU$11m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Tlou Energy Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Tlou Energy insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Tlou Energy. To that end, you should learn about the 3 warning signs we've spotted with Tlou Energy (including 1 which is a bit unpleasant).

Of course Tlou 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.