Insider Stock Buying Reaches US$2.25m On Element Fleet Management

It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Element Fleet Management Corp.'s (TSE:EFN) case, it's fantastic news for shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Element Fleet Management

Element Fleet Management Insider Transactions Over The Last Year

The Independent Director, G. Graham, made the biggest insider sale in the last 12 months. That single transaction was for CA$618k worth of shares at a price of CA$24.70 each. That means that an insider was selling shares at slightly below the current price (CA$28.60). 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. This single sale was just 33% of G. Graham's stake.

Happily, we note that in the last year insiders paid CA$2.3m for 89.43k shares. On the other hand they divested 31.72k shares, for CA$780k. Overall, Element Fleet Management insiders were net buyers during 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!

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insiders At Element Fleet Management Have Bought Stock Recently

Over the last three months, we've seen significant insider buying at Element Fleet Management. Overall, six insiders shelled out CA$789k for shares in the company -- and none sold. This makes one think the business has some good points.

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Element Fleet Management insiders own about CA$21m worth of shares. That equates to 0.2% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Element Fleet Management Tell Us?

It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. When combined with notable insider ownership, these factors suggest Element Fleet Management insiders are well aligned, and that they may think the share price is too low. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Element Fleet Management has 3 warning signs (and 1 which is significant) we think you should know about.

But note: Element Fleet Management 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 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.