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Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Element Fleet Management Corp. (TSE:EFN), that sends out a positive message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Element Fleet Management
Element Fleet Management Insider Transactions Over The Last Year
The Independent Director, G. Graham, made the biggest insider sale in the last 12 months. That single transaction was for CA$618k worth of shares at a price of CA$24.70 each. That means that an insider was selling shares at slightly below the current price (CA$28.75). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 33% of G. Graham's stake.
In the last twelve months insiders purchased 88.08k shares for CA$2.3m. On the other hand they divested 31.72k shares, for CA$780k. In total, Element Fleet Management insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Element Fleet Management is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At Element Fleet Management Have Bought Stock Recently
Over the last quarter, Element Fleet Management insiders have spent a meaningful amount on shares. Overall, seven insiders shelled out CA$1.2m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Does Element Fleet Management 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. We usually like to see fairly high levels of insider ownership. Insiders own 0.2% of Element Fleet Management shares, worth about CA$21m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Element Fleet Management Insider Transactions Indicate?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Element Fleet Management we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 2 warning signs for Element Fleet Management (of which 1 is a bit unpleasant!) you should know about.