Yahoo Finance Have Insiders Been Buying E2 Metals Limited (ASX:E2M) Shares This Year?
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in E2 Metals Limited (ASX:E2M).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
View our latest analysis for E2 Metals
The Last 12 Months Of Insider Transactions At E2 Metals
In the last twelve months, the biggest single purchase by an insider was when insider Martin Donohue bought AU$250k worth of shares at a price of AU$0.15 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.58), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
In the last twelve months insiders purchased 2.19m shares for AU$292k. On the other hand they divested 312.17k shares, for AU$14k. In total, E2 Metals insiders bought more than they sold over the last year. Their average price was about AU$0.13. To my mind it is good that insiders have invested their own money in the company. But we must note that the investments were made at well below today's share price. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
E2 Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
E2 Metals Insiders Bought Stock Recently
We saw some E2 Metals insider buying shares in the last three months. insider Gregory Seers purchased AU$27k worth of shares in that period. It's great to see that insiders are only buying, not selling. But the amount invested in the last three months isn't enough for us too put much weight on it, as a single factor.
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. We usually like to see fairly high levels of insider ownership. From our data, it seems that E2 Metals insiders own 14% of the company, worth about AU$11m. However, it's possible that insiders might have an indirect interest through a more complex structure. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
What Might The Insider Transactions At E2 Metals Tell Us?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think E2 Metals insiders are doubting the company, and they do own shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing E2 Metals. At Simply Wall St, we've found that E2 Metals has 6 warning signs (3 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
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.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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