We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we’ll take a look at whether insiders have been buying or selling shares in Enova International, Inc. (NYSE:ENVA).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Enova International Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Presiding Outside Director James Gray sold US$1.8m worth of shares at a price of US$32.75 per share. That is hardly a positive sign, even though it took place above the latest price (US$18.53). So it may not tell us anything about how insiders feel about the current share price.
All up, insiders sold more shares in Enova International than they bought, over the last year. The sellers received a price of around US$27.15, on average. It is certainly not great to see that insiders have sold shares in the company. But we note that the selling, on average, was at well above the recently traded price of US$18.53. The chart below shows insider transactions over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Enova International better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Enova International insiders own 2.4% of the company, currently worth about US$16m 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.
What Might The Insider Transactions At Enova International Tell Us?
It doesn’t really mean much that no insider has traded Enova International shares in the last quarter. The insider transactions at Enova International are not very heartening. But we do like the fact that insiders own a fair chunk of the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course Enova International may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.