Those following along with Entercom Communications Corp. (NYSE:ETM) will no doubt be intrigued by the recent purchase of shares by Joseph Field, Chairman Emeritus of the company, who spent a stonking US$1.2m on stock at an average price of US$2.24. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 4.0%.
Entercom Communications Insider Transactions Over The Last Year
In fact, the recent purchase by Chairman Emeritus Joseph Field was not their only acquisition of Entercom Communications shares this year. They previously made an even bigger purchase of US$2.0m worth of shares at a price of US$7.00 per share. That means that even when the share price was higher than US$2.35 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Entercom Communications insiders bought shares last year, they didn't sell. They paid about US$4.43 on average. This is nice to see since it implies that insiders might see value around current prices. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Entercom Communications
For a common shareholder, it is worth checking how many shares are held by company insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Entercom Communications insiders own about US$50m worth of shares. That equates to 15% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Entercom Communications Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Entercom Communications shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Entercom Communications. For example - Entercom Communications has 2 warning signs we think you should be aware of.
Of course Entercom Communications may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
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.
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