Elkem ASA (OB:ELK) Insiders Increased Their Holdings
We often see insiders buying up shares in companies that perform well over the long term. 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 Elkem ASA (OB:ELK).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.
Check out our latest analysis for Elkem
Elkem Insider Transactions Over The Last Year
In fact, the recent purchase by Michael Koenig was the biggest purchase of Elkem shares made by an insider individual in the last twelve months, according to our records. So it's clear an insider wanted to buy, at around the current price, which is kr22.58. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Elkem share holders is that an insider was buying at near the current price. Michael Koenig was the only individual insider to buy shares in the last twelve months.
You can see the insider transactions (by 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or 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. A high insider ownership often makes company leadership more mindful of shareholder interests. From what we can see in our data, insiders own only about kr8.3m worth of Elkem shares. However, it's possible that insiders might have an indirect interest through a more complex structure. We might be missing something but that seems like very low insider ownership.
What Might The Insider Transactions At Elkem Tell Us?
The recent insider purchase is heartening. And an analysis of the transactions over the last year also gives us confidence. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Elkem insiders are expecting a bright future. Of course, the future is what matters most. So if you are interested in Elkem, you should check out this free report on analyst forecasts for the company.
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, but not derivative transactions.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
