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Insiders of Babcock & Wilcox Enterprises, Inc. (NYSE:BW) reaped rewards after their US$569k investment jumped another US$60k

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Babcock & Wilcox Enterprises, Inc. (NYSE:BW) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 12% resulting in a US$66m addition to the company’s market value. Put another way, the original US$569k acquisition is now worth US$629k.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Babcock & Wilcox Enterprises

Babcock & Wilcox Enterprises Insider Transactions Over The Last Year

The CEO & Chairman of the Board Kenneth Young made the biggest insider purchase in the last 12 months. That single transaction was for US$163k worth of shares at a price of US$5.45 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$6.95. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$569k for 90.50k shares. But they sold 17.71k shares for US$127k. In total, Babcock & Wilcox Enterprises insiders bought more than they sold over the last year. Their average price was about US$6.29. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
insider-trading-volume

Babcock & Wilcox Enterprises is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Babcock & Wilcox Enterprises Insiders Bought Stock Recently

Over the last three months, we've seen significant insider buying at Babcock & Wilcox Enterprises. In total, insiders bought US$569k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.

Does Babcock & Wilcox Enterprises Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Babcock & Wilcox Enterprises insiders own about US$19m worth of shares. That equates to 3.2% 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 Babcock & Wilcox Enterprises Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Babcock & Wilcox Enterprises insiders are well aligned, and that they may think the share price is too low. While we like knowing 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 Babcock & Wilcox Enterprises is showing 2 warning signs in our investment analysis, and 1 of those is concerning...

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, but not derivative transactions.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.