Insiders who bought AU$608.0k worth of EML Payments Limited (ASX:EML) stock in the last year have seen some of their losses recouped as the stock gained 10.0% last week. However, the purchase is proving to be a costly gamble, since losses made by insiders have totalled AU$388k since the time of purchase.
Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
EML Payments Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Executive Chairman Anthony Hynes for AU$608k worth of shares, at about AU$0.61 per share. That means that even when the share price was higher than AU$0.22 (the recent price), an insider wanted to purchase shares. 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. It is encouraging to see an insider paid above the current price for shares, as it suggests they saw value, even at higher levels. Anthony Hynes was the only individual insider to buy during the last year.
You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for EML Payments
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Based on our data, EML Payments insiders have about 2.9% of the stock, worth approximately AU$2.7m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At EML Payments Tell Us?
The fact that there have been no EML Payments insider transactions recently certainly doesn't bother us. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think EML Payments insiders are doubting the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 2 warning signs for EML Payments you should be aware of.
Of course EML Payments 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 of direct interests only, but not derivative transactions or indirect interests.
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