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 Enbridge Inc. (TSE:ENB).
What Is Insider Selling?
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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.
The Last 12 Months Of Insider Transactions At Enbridge
Over the last year, we can see that the biggest insider sale was by the Director, David Tutcher, for CA$3.0m worth of shares, at about CA$50.00 per share. That means that an insider was selling shares at slightly below the current price (CA$56.03). 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. However, while insider selling is sometimes discouraging, it’s only a weak signal. We note that the biggest single sale was only 8.6% of David Tutcher’s holding.
Over the last year, we can see that insiders have bought 24.99k shares worth CA$1.3m. On the other hand they divested 83951 shares, for CA$4.2m. All up, insiders sold more shares in Enbridge than they bought, over the last year. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
I will like Enbridge better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Enbridge Insiders Bought Stock Recently
It’s good to see that Enbridge insiders have made notable investments in the company’s shares. We can see that President Al Monaco paid CA$334k for shares in the company. No-one sold. That shows some optimism about the company’s future.
Does Enbridge Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. It’s great to see that Enbridge insiders own 0.2% of the company, worth about CA$230m. 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 Does This Data Suggest About Enbridge Insiders?
The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The high levels of insider ownership, and the recent buying by an insider , suggests they are well aligned and optimistic. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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