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We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Enerplus Corporation (TSE:ERF).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Enerplus Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Glen Roane, sold CA$821k worth of shares at a price of CA$16.53 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (CA$9.80). So it is hard to draw any strong conclusion from it. Notably Glen Roane was also the biggest buyer, having purchased CA$906k worth of shares.
In the last twelve months insiders purchased 82000 shares for CA$906k. But they sold 233k for CA$3.0m. Over the last year we saw more insider selling of Enerplus shares, than buying. You can see a visual depiction of insider transactions (by 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!
Enerplus Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Enerplus. Overall, five insiders shelled out CA$180k for shares in the company — and none sold. This is a positive in our book as it implies some confidence.
Does Enerplus Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests Enerplus insiders own 0.2% of the company, worth about CA$4.3m. We prefer to see high levels of insider ownership.
So What Does This Data Suggest About Enerplus Insiders?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. Neither the level of insider ownership, nor the transactions over the last twelve months inspire us, but we think the recent buying is positive. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: Enerplus 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 aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.