It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Eddie Stobart Logistics plc (LON:ESL), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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, 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 it is perfectly logical to keep tabs on what insiders are doing. 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.’
Eddie Stobart Logistics Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the insider, David Meir, sold UK£61k worth of shares at a price of UK£1.21 per share. While we don’t usually like to see insider selling, it’s more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (UK£0.73). So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was David Meir.
Happily, we note that in the last year insiders paid UK£44k for 45000 shares. But they sold 50000 for UK£61k. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Does Eddie Stobart Logistics 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own UK£1.3m worth of Eddie Stobart Logistics stock, about 0.5% of the company. However, it’s possible that insiders might have an indirect interest through a more complex structure. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Eddie Stobart Logistics Insiders?
The fact that there have been no Eddie Stobart Logistics insider transactions recently certainly doesn’t bother us. The insider transactions at Eddie Stobart Logistics are not inspiring us to buy. And we’re not picking up on high enough insider ownership to give us any comfort. Of course, the future is what matters most. So if you are interested in Eddie Stobart Logistics, you should check out this free report on analyst forecasts for the company.
Of course Eddie Stobart Logistics may not be the best stock to buy. So you may wish to see this free collection of high quality 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.