Great news for Diversified Energy Company PLC (LON:DEC): Insiders acquired stock in large numbers last year
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Diversified Energy Company PLC's (LON:DEC) case, it's fantastic news for shareholders.
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.
View our latest analysis for Diversified Energy
Diversified Energy Insider Transactions Over The Last Year
In fact, the recent purchase by David Turner was the biggest purchase of Diversified Energy shares made by an insider individual in the last twelve months, according to our records. That means that even when the share price was higher than UK£0.92 (the recent price), an insider wanted to purchase shares. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Diversified Energy insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Diversified Energy Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Diversified Energy. Overall, three insiders shelled out UK£174k for shares in the company -- and none sold. This could be interpreted as suggesting a positive outlook.
Insider Ownership Of Diversified Energy
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 3.0% of Diversified Energy shares, worth about UK£27m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Diversified Energy Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Diversified Energy we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. When we did our research, we found 3 warning signs for Diversified Energy (2 can't be ignored!) that we believe deserve your full attention.
But note: Diversified 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.
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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.
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