We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Global Eagle Entertainment Inc. (NASDAQ:ENT).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Global Eagle Entertainment Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Executive Chairman Jeffrey Leddy bought US$216k worth of shares at a price of US$0.54 per share. We do like to see buying, but this purchase was made at well below the current price of US$0.87. 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 paid US$499k for 816k shares purchased. While Global Eagle Entertainment insiders bought shares last year, they didn't sell. Their average price was about US$0.61. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Global Eagle Entertainment is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Global Eagle Entertainment Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Global Eagle Entertainment. Overall, two insiders shelled out US$64k for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
Insider Ownership of Global Eagle Entertainment
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Based on our data, Global Eagle Entertainment insiders have about 5.0% of the stock, worth approximately US$4.0m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At Global Eagle Entertainment Tell Us?
It's certainly positive to see the recent insider purchases. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Global Eagle Entertainment stock. Of course, the future is what matters most. So if you are interested in Global Eagle Entertainment, you should check out this free report on analyst forecasts for the company.
Of course Global Eagle Entertainment 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.