Enerflex's CA$268m Market Cap Fall Books Insider Losses
The recent 28% drop in Enerflex Ltd.'s (TSE:EFX) stock could come as a blow to insiders who purchased CA$647k worth of stock at an average buy price of CA$8.37 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth CA$439k, which is not great.
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.
Check out our latest analysis for Enerflex
Enerflex Insider Transactions Over The Last Year
The Independent Director Juan Villegas made the biggest insider purchase in the last 12 months. That single transaction was for CA$245k worth of shares at a price of CA$8.50 each. That means that an insider was happy to buy shares at above the current price of CA$5.68. 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.
Happily, we note that in the last year insiders paid CA$647k for 77.31k shares. On the other hand they divested 15.30k shares, for CA$125k. In total, Enerflex insiders bought more than they sold over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Enerflex Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Enerflex. Not only was there no selling that we can see, but they collectively bought CA$96k worth of shares. That shows some optimism about the company's future.
Insider Ownership Of Enerflex
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, Enerflex insiders have about 0.7% of the stock, worth approximately CA$4.9m. I generally like to see higher levels of ownership.
So What Does This Data Suggest About Enerflex Insiders?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. 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. At Simply Wall St, we've found that Enerflex has 2 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
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 of direct interests only, but not derivative transactions or indirect interests.
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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.
