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In the last year, multiple insiders have substantially increased their holdings of Enviva Inc. (NYSE:EVA) stock, indicating that insiders' optimism about the company's prospects has increased.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Enviva Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director John Bumgarner bought US$995k worth of shares at a price of US$74.20 per share. That means that an insider was happy to buy shares at around the current price of US$76.17. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.
While Enviva insiders bought shares during the last year, they didn't sell. 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!
Enviva is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Enviva Insiders Bought Stock Recently
Over the last quarter, Enviva insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$1.2m worth of shares. This makes one think the business has some good points.
Does Enviva Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Enviva insiders own about US$223m worth of shares (which is 4.4% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Enviva Tell Us?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Enviva. Nice! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 3 warning signs with Enviva and understanding them should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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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.