It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Emclaire Financial Corp. (NASDAQ:EMCF).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Emclaire Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Matthew Lucco sold US$176k worth of shares at a price of US$36.00 per share. So we know that an insider sold shares at around the present share price of US$30.95. While their view may have changed since the sale, this is not a particularly positive fact. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price.
Happily, we note that in the last year insiders paid US$237k for 7.73k shares. On the other hand they divested 4.91k shares, for US$177k. Overall, Emclaire Financial insiders were net buyers last year. They paid about US$30.63 on average. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$30.95. 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!
Emclaire Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Emclaire Financial Have Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Emclaire Financial. Overall, 2 insiders shelled out US$237k for shares in the company — and none sold. This could be interpreted as suggesting a positive outlook.
Does Emclaire Financial 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. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Emclaire Financial insiders own 19% of the company, worth about US$16m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Emclaire Financial Insiders?
It’s certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Given that insiders also own a fair bit of Emclaire Financial we think they are probably pretty confident of a bright future. To put this in context, take a look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.