We often see insiders buying up shares in companies that perform well over the long term. 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 EVO Payments, Inc. (NASDAQ:EVOP), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for EVO Payments
EVO Payments Insider Transactions Over The Last Year
The insider, David Goldman, made the biggest insider sale in the last 12 months. That single transaction was for US$531k worth of shares at a price of US$30.32 each. So what is clear is that an insider saw fit to sell at around the current price of US$27.37. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
Insiders in EVO Payments didn't buy any shares in the last year. You can see the insider transactions (by 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!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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. We usually like to see fairly high levels of insider ownership. EVO Payments insiders own about US$14m worth of shares. That equates to 0.6% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The EVO Payments Insider Transactions Indicate?
The fact that there have been no EVO Payments insider transactions recently certainly doesn't bother us. Still, the insider transactions at EVO Payments in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in EVO Payments, you should check out this free report on analyst forecasts for the company.
But note: EVO Payments 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, but not derivative transactions.
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