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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Ennis, Inc. (NYSE:EBF).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.
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The Last 12 Months Of Insider Transactions At Ennis
The Executive VP & Corporate Secretary, Michael Magill, made the biggest insider sale in the last 12 months. That single transaction was for US$595k worth of shares at a price of US$20.01 each. So it's clear an insider wanted to take some cash off the table, even slightly below the current price of US$20.13. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 20% of Michael Magill's holding. The only individual insider seller over the last year was Michael Magill.
You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Ennis Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Ennis. In total, Executive VP & Corporate Secretary Michael Magill dumped US$595k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.