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It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Great Elm Capital Group, Inc. (NASDAQ:GEC), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Great Elm Capital Group
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Peter Reed bought US$91k worth of shares at a price of US$3.49 per share. That means that an insider was happy to buy shares at around the current price of US$3.80. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company’s future. 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. The good news for Great Elm Capital Group share holders is that insiders were buying at near the current price.
In the last twelve months insiders paid US$309k for 87860 shares purchased. Great Elm Capital Group may have bought shares in the last year, but they didn’t sell any. You can see the insider transactions (by 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!
Great Elm Capital Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Great Elm Capital Group
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data indicates that Great Elm Capital Group insiders own about US$7.8m worth of shares (which is 8.4% of the company). Overall, this level of ownership isn’t that impressive, but it’s certainly better than nothing!
So What Does This Data Suggest About Great Elm Capital Group Insiders?
The fact that there have been no Great Elm Capital Group insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Great Elm Capital Group insiders are doubting the company. Along with insider transactions, I recommend checking if Great Elm Capital Group is growing revenue. This free chart of historic revenue and earnings should make that easy.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.