Bullish ECN Capital Insiders Loaded Up On US$2.48m Of Stock

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

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

Check out our latest analysis for ECN Capital

ECN Capital Insider Transactions Over The Last Year

In the last twelve months, the biggest single purchase by an insider was when CEO & Executive Director Steven Hudson bought CA$539k worth of shares at a price of CA$1.80 per share. Even though the purchase was made at a significantly lower price than the recent price (CA$3.09), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.

In the last twelve months insiders purchased 1.33m shares for CA$2.5m. On the other hand they divested 197.11k shares, for CA$488k. In total, ECN Capital insiders bought more than they sold over the last year. 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!

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

ECN Capital Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at ECN Capital. In total, CEO & Executive Director Steven Hudson sold CA$351k worth of shares in that time. On the flip side, Independent Director Paul Stoyan spent CA$77k on purchasing shares. We don't view these transactions as a positive sign.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 7.1% of ECN Capital shares, worth about CA$58m. 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 ECN Capital Insiders?

The insider sales have outweighed the insider buying, at ECN Capital, in the last three months. But we take heart from prior transactions. And insiders do own shares. So we're happy enough to look past some selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with ECN Capital and understanding it should be part of your investment process.

Of course ECN Capital 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.