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Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of The Eastern Company (NASDAQ:EML), it sends a favourable 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 do think it is perfectly logical to keep tabs on what insiders are doing.
Check out our latest analysis for Eastern
Eastern Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Mark Hernandez for US$97k worth of shares, at about US$30.00 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$27.50). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Eastern insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders At Eastern Have Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Eastern. Insiders bought US$19k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Eastern insiders own about US$12m worth of shares. That equates to 7.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Eastern Tell Us?
We note a that there has been a bit of insider buying recently (but no selling). The net investment is not enough to encourage us much. But insiders have shown more of an appetite for the stock, over the last year. Insiders own shares in Eastern and we see no evidence to suggest they are worried about the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for Eastern that deserve your attention before buying any shares.