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

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.

The post Directors have bought more than $1.6m of New Hope shares in a week. Should you buy? appeared first on The Motley Fool Australia.

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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.

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