This Insider Has Just Sold Shares In Ero Copper

We wouldn't blame Ero Copper Corp. (TSE:ERO) shareholders if they were a little worried about the fact that Lyle Braaten, the Independent Director recently netted about CA$1.3m selling shares at an average price of CA$35.22. That sale reduced their total holding by 12% which is hardly insignificant, but far from the worst we've seen.

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Ero Copper Insider Transactions Over The Last Year

Notably, that recent sale by Lyle Braaten is the biggest insider sale of Ero Copper shares that we've seen in the last year. That means that even when the share price was slightly below the current price of CA$35.22, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 12% of Lyle Braaten's stake.

Over the last year, we can see that insiders have bought 14.14k shares worth CA$273k. But they sold 36.67k shares for CA$1.3m. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for Ero Copper

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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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Ero Copper insiders own about CA$140m worth of shares (which is 3.8% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Ero Copper Tell Us?

Unfortunately, there has been more insider selling of Ero Copper stock, than buying, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. But since Ero Copper is profitable and growing, we're not too worried by this. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. 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 - Ero Copper has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.