Insiders Give Up UK£12k As Essentra Stock Drops To UK£1.04

The recent 12% drop in Essentra plc's (LON:ESNT) stock could come as a blow to insiders who purchased UK£73.4k worth of stock at an average buy price of UK£1.25 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth UK£61.1k, which is not great.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

The Last 12 Months Of Insider Transactions At Essentra

The Independent Non-Executive Chairman Steve Good made the biggest insider purchase in the last 12 months. That single transaction was for UK£38k worth of shares at a price of UK£1.09 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being UK£1.04). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

Essentra insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around UK£1.25. These transactions suggest that insiders have considered the current price attractive. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Essentra

There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).

Does Essentra Boast High Insider Ownership?

Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Our data isn't picking up on much insider ownership at Essentra, though insiders do hold about UK£302k worth of shares. It's always possible we are missing something but from our data, it looks like insider ownership is minimal.

So What Do The Essentra Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Essentra shares in the last quarter. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Essentra insiders are doubting the company. 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. While conducting our analysis, we found that Essentra has 2 warning signs and it would be unwise to ignore them.

But note: Essentra 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.