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Should You Take Comfort From Insider Transactions At Genie Energy Ltd. (NYSE:GNE)?

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We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Genie Energy Ltd. (NYSE:GNE).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.

See our latest analysis for Genie Energy

The Last 12 Months Of Insider Transactions At Genie Energy

In the last twelve months, the biggest single purchase by an insider was when Vice Chairman of the Board James Courter bought US$397k worth of shares at a price of US$7.02 per share. That means that an insider was happy to buy shares at around the current price of US$7.65. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider bought shares at close to current prices. James Courter was the only individual insider to buy over the year.

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

NYSE:GNE Recent Insider Trading, January 8th 2020
NYSE:GNE Recent Insider Trading, January 8th 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Genie Energy Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at Genie Energy. Specifically, insiders ditched US$80k 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 Genie Energy

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. It's great to see that Genie Energy insiders own 43% of the company, worth about US$88m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Genie Energy Tell Us?

Insiders sold stock recently, but they haven't been buying. But we take heart from prior transactions. We are also comforted by the high levels of insider ownership. So we're not too bothered by recent selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Genie Energy.

But note: Genie Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.