Don’t Ignore The Fact That This Insider Just Sold Some Shares In Enghouse Systems Limited (TSE:ENGH)

Anyone interested in Enghouse Systems Limited (TSE:ENGH) should probably be aware that the Independent Director, Eric Demirian, recently divested CA$307k worth of shares in the company, at an average price of CA$51.24 each. The eyebrow raising move amounted to a reduction of 23% in their holding.

See our latest analysis for Enghouse Systems

Enghouse Systems Insider Transactions Over The Last Year

The Chairman & CEO, Stephen Sadler, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.7m worth of shares at a price of CA$36.59 each. That means that an insider was selling shares at slightly below the current price (CA$51.84). 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. Please do note, however, that sellers may have a variety of reasons for selling, so we don’t know for sure what they think of the stock price. It is worth noting that this sale was only 0.6% of Stephen Sadler’s holding.

Over the last year we saw more insider selling of Enghouse Systems shares, than buying. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

TSX:ENGH Recent Insider Trading, January 14th 2020
TSX:ENGH Recent Insider Trading, January 14th 2020

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Does Enghouse Systems 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. A high insider ownership often makes company leadership more mindful of shareholder interests. Enghouse Systems insiders own about CA$547m worth of shares (which is 19% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Enghouse Systems Insider Transactions Indicate?

The stark truth for Enghouse Systems is that there has been more insider selling than insider buying in the last three months. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. But since Enghouse Systems is profitable and growing, we’re not too worried by this. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn’t make us feel confident about the company. Of course, the future is what matters most. So if you are interested in Enghouse Systems, you should check out this free report on analyst forecasts for the company.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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