Stock Analysis

Wendy Hannam Is The Independent Director of Encore Capital Group, Inc. (NASDAQ:ECPG) And They Just Picked Up 100% More Shares

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NasdaqGS:ECPG
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Whilst it may not be a huge deal, we thought it was good to see that the Encore Capital Group, Inc. (NASDAQ:ECPG) Independent Director, Wendy Hannam, recently bought US$78k worth of stock, for US$31.01 per share. Even though that isn't a massive buy, it did increase their holding by 100%, which is arguably a good sign.

Check out our latest analysis for Encore Capital Group

Encore Capital Group Insider Transactions Over The Last Year

Notably, that recent purchase by Wendy Hannam is the biggest insider purchase of Encore Capital Group shares that we've seen in the last year. That implies that an insider found the current price of US$33.77 per share to be enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. Happily, the Encore Capital Group insider decided to buy shares at close to current prices. Wendy Hannam was the only individual insider to buy during the last year.

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!

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NasdaqGS:ECPG Insider Trading Volume November 19th 2020

There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with 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. Insiders own 1.5% of Encore Capital Group shares, worth about US$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Encore Capital Group Insider Transactions Indicate?

It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Encore Capital Group insiders are well aligned, and that they may think the share price is too low. While we like knowing 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. Our analysis shows 2 warning signs for Encore Capital Group (1 is concerning!) and we strongly recommend you look at these before investing.

Of course Encore Capital Group 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, but not derivative transactions.

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