Over the past year, insiders sold US$601k worth of ePlus inc. (NASDAQ:PLUS) stock at an average price of US$56.19 per share allowing them to get the most out of their money. After the stock price dropped 3.9% last week, the company's market value declined by US$57m, but insiders were able to mitigate their losses.
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.
ePlus Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Independent Director, Eric Hovde, for US$554k worth of shares, at about US$55.92 per share. So what is clear is that an insider saw fit to sell at around the current price of US$52.82. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
Insiders in ePlus didn't buy any shares in the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insiders at ePlus Have Sold Stock Recently
The last three months saw significant insider selling at ePlus. In total, Independent Director Eric Hovde sold US$554k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. Insiders own 2.2% of ePlus shares, worth about US$31m. 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 ePlus Insider Transactions Indicate?
An insider hasn't bought ePlus stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that ePlus is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. We'd practice some caution before buying! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To that end, you should learn about the 2 warning signs we've spotted with ePlus (including 1 which is concerning).
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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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