Who Has Been Selling EVERTEC, Inc. (NYSE:EVTC) Shares?
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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in EVERTEC, Inc. (NYSE:EVTC).
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. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
See our latest analysis for EVERTEC
EVERTEC Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Executive Vice President of Sales for Puerto Rico Carlos Ramírez for US$1.2m worth of shares, at about US$26.34 per share. So it’s clear an insider wanted to take some cash off the table, even below the current price of US$28.70. While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was 70.8% of Carlos Ramírez’s stake.
All up, insiders sold more shares in EVERTEC than they bought, over the last year. The sellers received a price of around US$26.57, on average. We don’t gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at EVERTEC Have Sold Stock Recently
Over the last three months, we’ve seen significant insider selling at EVERTEC. In total, insiders dumped US$2.3m worth of shares in that time, and we didn’t record any purchases whatsoever. In light of this it’s hard to argue that all the directors think that the shares are a bargain.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. EVERTEC insiders own about US$14m worth of shares. That equates to 0.7% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The EVERTEC Insider Transactions Indicate?
Insiders sold EVERTEC shares recently, but they didn’t buy any. Despite some insider buying, the longer term picture doesn’t make us feel much more positive. But it is good to see that EVERTEC is growing earnings. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d think twice before buying! Of course, the future is what matters most. So if you are interested in EVERTEC, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 editorial-team@simplywallst.com.
