Don't Ignore The Insider Selling In Environmental Group

Anyone interested in The Environmental Group Limited (ASX:EGL) should probably be aware that a company insider, Ellis Richardson, recently divested AU$748k worth of shares in the company, at an average price of AU$0.26 each. However, the silver lining is that the sale only reduced their total holding by 9.9%, so we're hesitant to read anything much into it, on its own.

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Environmental Group Insider Transactions Over The Last Year

In fact, the recent sale by Ellis Richardson was the biggest sale of Environmental Group shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of AU$0.24. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Over the last year, we can see that insiders have bought 175.92k shares worth AU$45k. But they sold 2.92m shares for AU$748k. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

See our latest analysis for Environmental Group

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

Does Environmental Group Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Environmental Group insiders own 24% of the company, worth about AU$22m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Environmental Group Insiders?

An insider sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. But it is good to see that Environmental Group is growing earnings. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Environmental Group. For example, Environmental Group has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course Environmental Group 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 of direct interests only, but not derivative transactions or indirect interests.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.