One of today’s biggest movers is little-known energy storage company Eos Energy (NASDAQ:EOSE). Shares of EOSE stock are surging more than 12% in afternoon trading as investors digest some positive news around the commercial and industrial microgrid company.
Investors appear to be particularly interested in insider buying activity at the company. Following some rather wild trading over the past month (EOSE soared from around $2 per share to roughly $5 before giving up most of those gains), company management has seen it fit to buy the dip. Indeed, during last week’s selloff in which shares of EOSE stock temporarily dipped below $1.50, both Eos’ CEO and Chief Financial Officer reportedly bought shares. At current levels, they’ve already made a nice profit.
Let’s dive into what to make of this move — and what investors can expect moving forward.
EOSE Stock Stabilizes as Insiders Bet on Shares
The moves from Eos Energy CEO Joe Mastrangelo and CFO Nathan Kroeker may be small in the grand scheme of things. Mastrangelo reportedly bought 31,199 shares for $2.23 apiece while Kroeker buying 4,000 shares at about $2.14 apiece. However, these purchases indicate that management believes the company’s own stock price is significantly undervalued at current levels. By all accounts, this sends a positive signal to the market and prospective investors.
Of course, insider buying activity is often a much more reliable indicator of a company’s current relative valuation than insider selling. Executives may exercise their stock options if they need to pay taxes, or accumulate cash to diversify their portfolios. When insiders decide it’s time to bet big on the company they manage, though, investors tend to perk up. This is the company they know best, after all. Today, investors are following suit, betting that insiders know something they don’t about Eos’ long-term prospects.
That said, these kinds of intraday moves aren’t uncommon and EOSE stock remains a volatile one. Thus, while today’s move has a clear catalyst, this is a still a stock investors ought to be careful with. Another word for volatility is risk and as long as EOSE continues to see double-digit percentage swings on a daily basis, many investors may remain on the sidelines. Still, for those looking to take a speculative risk-on bet right now, shares of EOSE are clearly garnering interest.
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On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
