Insiders Buying Ecolomondo Might Wish They Invested More, Stock Gains 19%
Ecolomondo Corporation (CVE:ECM) insiders who bought shares over the past year were rewarded handsomely last week. The stock rose 19%, resulting in a CA$7.9m rise in the company's market capitalisation, translating to a gain of 36% on their initial investment. As a result, the stock they originally bought for CA$78.7k is now worth CA$107.5k.
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.
The Last 12 Months Of Insider Transactions At Ecolomondo
The Executive Chairman Eliot Sorella made the biggest insider purchase in the last 12 months. That single transaction was for CA$79k worth of shares at a price of CA$0.16 each. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of CA$0.22. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
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!
See our latest analysis for Ecolomondo
Ecolomondo is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.
Does Ecolomondo Boast High 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. Ecolomondo insiders own about CA$45m worth of shares (which is 74% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Ecolomondo Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about Ecolomondo. One for the watchlist, at least! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ecolomondo. At Simply Wall St, we've found that Ecolomondo has 5 warning signs (4 are a bit unpleasant!) that deserve your attention before going any further with your analysis.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.