Should You Take Comfort From Insider Transactions At EnQuest PLC (LON:ENQ)?
It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in EnQuest PLC (LON:ENQ).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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'.
See our latest analysis for EnQuest
EnQuest Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Chief Executive & Executive Director Amjad Bseisu for UK£109k worth of shares, at about UK£0.098 per share. That implies that an insider found the current price of UK£0.10 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the EnQuest insiders decided to buy shares at close to current prices.
While EnQuest insiders bought shares during the last year, they didn't sell. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
EnQuest is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does EnQuest Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data isn't picking up on much insider ownership at EnQuest, though insiders do hold about UK£313k worth of shares. But they may have an indirect interest through a corporate structure that we haven't picked up on. We might be missing something but that seems like very low insider ownership.
What Might The Insider Transactions At EnQuest Tell Us?
It doesn't really mean much that no insider has traded EnQuest shares in the last quarter. 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 EnQuest insiders are doubting the company. 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. While conducting our analysis, we found that EnQuest has 1 warning sign and it would be unwise to ignore it.
But note: EnQuest may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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, but not derivative transactions.
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. 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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