Directors have bought more than $1.6m of New Hope shares in a week. Should you buy?

Insiders seem to think the stock looks attractive at its current level.

| More on:
A female coal miner wearing a white hardhat and orange high-vis vest holds a lump of coal and smiles as the Whitehaven Coal share price rises today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The New Hope share price is trading at $5.82 at the time of writing
  • That's as much as 7% higher than insiders were paying to buy the stock late last week
  • Experts are divided over whether now is a good time to buy into the ASX 200 coal giant

Directors of S&P/ASX 200 Index (ASX: XJO) coal share New Hope Corporation Ltd (ASX: NHC) have been on a buying spree.

Three of the company's insiders snapped up more than $1.6 million worth of its stock on Thursday – paying an average price of around $5.51 apiece.

And that looks to have been a bargain. The New Hope share price is currently trading 2.47% higher at $5.82.

Insider buying can sometimes signal that those in the know are expecting big things from a stock.

So, could now be a good time to jump on board New Hope shares? Let's take a look.

Insiders snap up New Hope shares

Billionaire Robert Millner and son Tom Millner – both of whom sit on the New Hope board – saw their respective indirect interest in the company bolstered by 300,000 shares last week.

The pair both hold an interest in J. S. Millner Holdings Pty Limited, which snapped up the stake for a total of around $1.65 million on Thursday. It paid between $5.45 per share and $5.62 per share for the parcel.

Meanwhile, director Jacqueline McGill got an even better deal, bolstering her position in the ASX 200 coal favourite by 10,000 shares, paying $5.41 apiece on market – a total spend of $54,100.

Is the stock a buy?

So, is now a good time to buy New Hope shares? Well, that depends on who you ask.

The company itself seemingly thinks so. It resumed its $300 million on-market share buyback last month.

Meanwhile, Morgans has an add rating and a $6.35 price target on the stock, my fool colleague James reports. That represents a potential 10% upside on its current level.

The broker is said to expect the company to continue growing its already whopping dividends in the coming years.

On the other hand, Goldman Sachs believes the New Hope share price overvalues the company given its expectation that coal prices will soon slump.

It has a sell rating and a $3.70 price target on the stock – a potential 36% downside.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Materials Shares

This $9.3 billion ASX 200 stock just surged 7%. Here's why

This ASX 200 stock seems to be acting as a safe haven today.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Why is this ASX 300 battery tech stock jumping 11% today?

Another agreement and big plans are getting investors excited on Monday.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

'I hate what I have done': Mineral Resources share price down as Ellison laments actions

Managing Director Chris Ellison says he deeply regrets the impact of his 'error of judgement'.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Materials Shares

Why is this ASX lithium stock jumping to a 52-week high today?

This lithium stock is smashing the market this year despite all the doom and gloom in the industry.

Read more »

Projection of two hands being shaken on a deal.
Materials Shares

Sayona Mining shares sink 13% on Piedmont Lithium merger news and capital raise

This merger will create the largest lithium producer in North America.

Read more »

Miner looking at a tablet.
Materials Shares

Down 28% in 2024, why this ASX 200 lithium stock could now be 'deeply undervalued'

The ASX 200 lithium stock has drawn plenty of investor attention over the past month.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Materials Shares

Buy BHP shares for a 20%+ return

Goldman Sachs expects big total returns from this mining giant.

Read more »

Miner looking at a tablet.
Materials Shares

Here's why ASX uranium shares are ripping higher today

Uranium shares are smashing the markets today.

Read more »