We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in ENCE Energía y Celulosa, S.A. (BME:ENC).

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. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

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The Last 12 Months Of Insider Transactions At ENCE Energía y Celulosa

In the last twelve months, the biggest single sale by an insider was when Proprietary External Director José Echenique Landiríbar sold €509k worth of shares at a price of €6.36 per share. So we know that an insider sold shares at around the present share price of €6.35. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment. The only individual insider seller over the last year was José Echenique Landiríbar.

You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

I will like ENCE Energía y Celulosa better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Does ENCE Energía y Celulosa Boast High 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. Our data indicates that ENCE Energía y Celulosa insiders own about €8.3m worth of shares (which is 0.6% of the company). But they may have an indirect interest through a corporate structure that we haven’t picked up on. We do generally prefer see higher levels of insider ownership.

What Might The Insider Transactions At ENCE Energía y Celulosa Tell Us?

The fact that there have been no ENCE Energía y Celulosa insider transactions recently certainly doesn’t bother us. The insider transactions at ENCE Energía y Celulosa are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Of course, the future is what matters most. So if you are interested in ENCE Energía y Celulosa, you should check out this free report on analyst forecasts for the company.

But note: ENCE Energía y Celulosa 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.

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.