Have Insiders Sold Enghouse Systems Shares Recently?

We wouldn't blame Enghouse Systems Limited (TSE:ENGH) shareholders if they were a little worried about the fact that Stephen Sadler, the Chairman & CEO recently netted about CA$1.1m selling shares at an average price of CA$36.62. However, that sale only accounted for 0.5% of their holding, so arguably it doesn't say much about their conviction.

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The Last 12 Months Of Insider Transactions At Enghouse Systems

In fact, the recent sale by Stephen Sadler was the biggest sale of Enghouse Systems shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (CA$37.37). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 0.5% of Stephen Sadler's stake.

Over the last year, we can see that insiders have bought 2.94k shares worth CA$109k. On the other hand they divested 41.60k shares, for CA$1.5m. Stephen Sadler divested 41.60k shares over the last 12 months at an average price of CA$36.57. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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Insider Ownership Of Enghouse Systems

For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Enghouse Systems insiders own 18% of the company, currently worth about CA$357m based on the recent share price. 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 Enghouse Systems Insider Transactions Indicate?

The insider sales have outweighed the insider buying, at Enghouse Systems, in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. It is good to see high insider ownership, but the insider selling leaves us cautious. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. In terms of investment risks, we've identified 1 warning sign with Enghouse Systems and understanding this should be part of your investment process.

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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.