In This Article:
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in ECP Emerging Growth Limited (ASX:ECP).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
View our latest analysis for ECP Emerging Growth
The Last 12 Months Of Insider Transactions At ECP Emerging Growth
The insider Emmanuel Pohl made the biggest insider purchase in the last 12 months. That single transaction was for AU$288k worth of shares at a price of AU$1.00 each. Even though the purchase was made at a significantly lower price than the recent price (AU$1.33), we still think insider buying is a positive. 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.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
ECP Emerging Growth is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It's great to see that ECP Emerging Growth insiders own 42% of the company, worth about AU$10m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The ECP Emerging Growth Insider Transactions Indicate?
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. Judging from their transactions, and high insider ownership, ECP Emerging Growth insiders feel good about the company's future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ECP Emerging Growth. For instance, we've identified 3 warning signs for ECP Emerging Growth (1 can't be ignored) you should be aware of.