As EML Payments Limited's (ASX:EML)) market cap dropped by AU$71m, insiders who sold AU$18m worth of stock were able to offset their losses

By
Simply Wall St
Published
November 23, 2021
ASX:EML
Source: Shutterstock

Insiders seem to have made the most of their holdings by selling AU$18m worth of EML Payments Limited (ASX:EML) stock at an average sell price of AU$5.10 during the past year. After the stock price dropped 6.5% last week, the company's market value declined by AU$71m, but insiders were able to mitigate their losses.

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.

View our latest analysis for EML Payments

EML Payments Insider Transactions Over The Last Year

The Group CEO, Thomas Cregan, made the biggest insider sale in the last 12 months. That single transaction was for AU$8.6m worth of shares at a price of AU$4.91 each. 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 (AU$2.72). So it is hard to draw any strong conclusion from it.

Insiders in EML Payments didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
ASX:EML Insider Trading Volume November 23rd 2021

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership of EML Payments

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 4.8% of EML Payments shares, worth about AU$48m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Does This Data Suggest About EML Payments Insiders?

It doesn't really mean much that no insider has traded EML Payments shares in the last quarter. We don't take much encouragement from the transactions by EML Payments insiders. But it's good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing EML Payments. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of EML Payments.

But note: EML Payments may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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.

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