We wouldn't blame ECN Capital Corp. (TSE:ECN) shareholders if they were a little worried about the fact that Steven Hudson, the CEO & Director recently netted about CA$7.4m selling shares at an average price of CA$8.27. However, it's crucial to note that they remain very much invested in the stock and that sale only reduced their holding by 7.0%.
The Last 12 Months Of Insider Transactions At ECN Capital
Notably, that recent sale by Steven Hudson is the biggest insider sale of ECN Capital shares that we've seen in the last year. So what is clear is that an insider saw fit to sell at around the current price of CA$8.04. 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).
Happily, we note that in the last year insiders paid CA$3.3m for 707.82k shares. But they sold 1.40m shares for CA$10m. Steven Hudson ditched 1.40m shares over the year. The average price per share was US$7.20. 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Does ECN Capital 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. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that ECN Capital insiders own 7.5% of the company, worth about CA$144m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The ECN Capital Insider Transactions Indicate?
The insider sales have outweighed the insider buying, at ECN Capital, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. On the plus side, ECN Capital makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that ECN Capital has 3 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis.
But note: ECN Capital 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.
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