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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 shareholders might well want to know whether insiders have been buying or selling shares in Equitrans Midstream Corporation (NYSE:ETRN).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Equitrans Midstream Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by President Thomas Karam for US$5.1m worth of shares, at about US$20.52 per share. That means that an insider was happy to buy shares at above the current price of US$19.55. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. 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.
Over the last year, we can see that insiders have bought 272k shares worth US$5.6m. But insiders sold 4866 shares worth US$100k. Overall, Equitrans Midstream insiders were net buyers last year. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
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.
Insiders at Equitrans Midstream Have Bought Stock Recently
There has been significantly more insider buying, than selling, at Equitrans Midstream, over the last three months. In total, four insiders bought US$5.6m worth of shares in that time. But David Porges sold shares worth US$100k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
Does Equitrans Midstream Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 0.4% of Equitrans Midstream shares, worth about US$20m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At Equitrans Midstream Tell Us?
It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. When combined with notable insider ownership, these factors suggest Equitrans Midstream insiders are well aligned, and that they may think the share price is too low. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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.