Yahoo Finance Quite a few insiders invested in Enerflex Ltd. (TSE:EFX) last year which is positive news for shareholders
It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Enerflex Ltd.'s (TSE:EFX) case, it's fantastic news for shareholders.
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.
See our latest analysis for Enerflex
Enerflex Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director Juan Villegas for CA$245k worth of shares, at about CA$8.50 per share. That means that even when the share price was higher than CA$7.76 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
In the last twelve months Enerflex insiders were buying shares, but not selling. 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!
Enerflex is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Enerflex Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at Enerflex. Insiders purchased CA$53k worth of shares in that period. We like it when there are only buyers, and no sellers. 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 Of Enerflex
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. From looking at our data, insiders own CA$6.1m worth of Enerflex stock, about 0.6% of the company. We prefer to see high levels of insider ownership.
So What Do The Enerflex Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that Enerflex insiders are reasonably well aligned, and optimistic for the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 2 warning signs for Enerflex (1 is concerning!) and we strongly recommend you look at them before investing.
But note: Enerflex 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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