Quite a few insiders invested in Enterprise Bancorp, Inc. (NASDAQ:EBTC) last year which is positive news for shareholders
Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Enterprise Bancorp, Inc. (NASDAQ:EBTC), it sends a favourable message to the company's shareholders.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for Enterprise Bancorp
The Last 12 Months Of Insider Transactions At Enterprise Bancorp
The Founder & Executive Chairman of the Board, George Duncan, made the biggest insider sale in the last 12 months. That single transaction was for US$137k worth of shares at a price of US$34.23 each. That means that an insider was selling shares at slightly below the current price (US$35.25). As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 1.0% of George Duncan's holding.
In the last twelve months insiders purchased 7.10k shares for US$239k. But insiders sold 6.50k shares worth US$217k. In the last twelve months there was more buying than selling by Enterprise Bancorp insiders. The average buy price was around US$33.73. It's great to see insiders putting their own cash into the company's stock, albeit at below the recent share price. 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!
Enterprise Bancorp is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Enterprise Bancorp Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at Enterprise Bancorp. We note insiders cashed in US$205k worth of shares. On the flip side, insiders spent US$112k on purchasing shares. Generally this level of net selling might be considered a bit bearish.
Does Enterprise Bancorp Boast High Insider Ownership?
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. We usually like to see fairly high levels of insider ownership. Enterprise Bancorp insiders own 25% of the company, currently worth about US$105m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Enterprise Bancorp Tell Us?
Unfortunately, there has been more insider selling of Enterprise Bancorp stock, than buying, in the last three months. But we take heart from prior transactions. On top of that, insiders own a significant portion of the company. So we're not too bothered by recent selling. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Enterprise Bancorp.
Of course Enterprise Bancorp 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.
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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.
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