Insiders who acquired NZ$8.46m worth of EROAD Limited's (NZSE:ERD) stock at an average price of NZ$1.01 in the past 12 months may be dismayed by the recent 12% price decline. 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 NZ$7.23m, which is not great.
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.
EROAD Insider Transactions Over The Last Year
The insider Anthony Kandziora made the biggest insider purchase in the last 12 months. That single transaction was for NZ$2.2m worth of shares at a price of NZ$1.03 each. That means that even when the share price was higher than NZ$0.86 (the recent price), an insider wanted to purchase shares. It's very possible they regret the purchase, but it's more likely they are bullish about the company. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 8.40m shares for NZ$8.5m. But insiders sold 1.21m shares worth NZ$1.3m. In total, EROAD insiders bought more than they sold over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for EROAD
EROAD is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Insiders At EROAD Have Bought Stock Recently
There has been significantly more insider buying, than selling, at EROAD, over the last three months. In fact, eight insiders bought NZ$4.2m worth of shares. On the other hand, CEO, Executive VP & Company Secretary Mark Heine netted NZ$285k by selling. Insiders have spent more buying shares than they have selling, so on balance we think they are are probably optimistic.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. We usually like to see fairly high levels of insider ownership. From our data, it seems that EROAD insiders own 9.8% of the company, worth about NZ$16m. Whilst better than nothing, we're not overly impressed by these holdings.
So What Does This Data Suggest About EROAD Insiders?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of EROAD we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. You'd be interested to know, that we found 2 warning signs for EROAD and we suggest you have a look.
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.
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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