Keep An Eye On Elliptic Laboratories As Insider Stock Selling Hits kr5.7m

While Elliptic Laboratories ASA (OB:ELABS) shareholders have had a good week with the stock up 12%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell kr5.7m worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Elliptic Laboratories

The Last 12 Months Of Insider Transactions At Elliptic Laboratories

In the last twelve months, the biggest single sale by an insider was when the Co-Founder, Laila Danielsen, sold kr5.7m worth of shares at a price of kr22.83 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. It's of some comfort that this sale was conducted at a price well above the current share price, which is kr16.20. So it may not tell us anything about how insiders feel about the current share price. Laila Danielsen was the only individual insider to sell shares in the last twelve months.

In the last twelve months insiders purchased 140.00k shares for kr2.8m. On the other hand they divested 250.00k shares, for kr5.7m. 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!

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Insiders At Elliptic Laboratories Have Bought Stock Recently

We saw some Elliptic Laboratories insider buying shares in the last three months. CFO & Investor Relations Lars Holmoy shelled out kr290k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.

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 appears that Elliptic Laboratories insiders own 31% of the company, worth about kr518m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Elliptic Laboratories Insider Transactions Indicate?

The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The recent buying by an insider , along with high insider ownership, suggest that Elliptic Laboratories insiders are fairly aligned, and optimistic. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Elliptic Laboratories. For example, Elliptic Laboratories has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Of course Elliptic Laboratories may not be the best stock to buy. So you may wish to see this free collection of high quality 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.