Insiders might want to re-evaluate their US$569k stock purchase as Babcock & Wilcox Enterprises, Inc. (NYSE:BW) drops to US$361m
Insiders who bought US$569k worth of Babcock & Wilcox Enterprises, Inc.'s (NYSE:BW) stock at an average buy price of US$6.29 over the last year may be disappointed by the recent 14% 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 US$371k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.
Check out our latest analysis for Babcock & Wilcox Enterprises
Babcock & Wilcox Enterprises Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by CEO & Chairman of the Board Kenneth Young for US$163k worth of shares, at about US$5.45 per share. That means that an insider was happy to buy shares at above the current price of US$4.10. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months Babcock & Wilcox Enterprises insiders were buying shares, but not selling. They paid about US$6.29 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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.
Does Babcock & Wilcox Enterprises Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Babcock & Wilcox Enterprises insiders own 3.6% of the company, worth about US$13m. 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?
There haven't been any insider transactions in the last three months -- that doesn't mean much. But insiders have shown more of an appetite for the stock, over the last year. Insiders do have a stake in Babcock & Wilcox Enterprises and their transactions don't cause us concern. 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. Case in point: We've spotted 5 warning signs for Babcock & Wilcox Enterprises you should be aware of, and 2 of these shouldn't be ignored.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, 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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