Have Insiders Sold Ero Copper Shares Recently?

Simply Wall St · 05/13 10:39

Anyone interested in Ero Copper Corp. (TSE:ERO) should probably be aware that the Independent Director, Lyle Braaten, recently divested CA$641k worth of shares in the company, at an average price of CA$30.20 each. However, the silver lining is that the sale only reduced their total holding by 6.2%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Ero Copper

Ero Copper Insider Transactions Over The Last Year

In fact, the recent sale by Lyle Braaten was the biggest sale of Ero Copper shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of CA$29.43. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).

Happily, we note that in the last year insiders paid CA$408k for 24.05k shares. But they sold 41.21k shares for CA$1.1m. Lyle Braaten divested 41.21k shares over the last 12 months at an average price of US$27.66. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

TSX:ERO Insider Trading Volume May 13th 2024

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

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Ero Copper insiders own 9.8% of the company, worth about CA$298m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

What Might The Insider Transactions At Ero Copper Tell Us?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about 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. Our analysis shows 4 warning signs for Ero Copper (1 is a bit unpleasant!) and we strongly recommend you look at them before investing.

Of course Ero Copper 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.