Trade Alert: Steven Hudson, CEO and Executive Director of ECN Capital Corp. (TSE: ECN), just spent US $ 1.7 million to buy 1.3% more shares
Those who follow with ECN Capital Corp. (TSE: ECN) will no doubt be intrigued by the recent share purchase by Steven Hudson, CEO and Executive Director of the company, who spent CA $ 1.7 million on shares at an average price of $ 10.47 THAT. While this only increased their holding size by 1.3%, it is still a big change from our standards.
Check out our latest review for ECN Capital
ECN Capital insider trading in the past year
Notably, this recent purchase by CEO and Executive Director Steven Hudson wasn’t the only time they’ve traded shares of ECN Capital this year. They previously made a to sell of – C $ 7.4 million of shares at a price of C $ 8.38 per share. This means that even when the share price was below the current price of C $ 10.69, an insider wanted to cash in some shares. Generally, we find it disheartening when insiders sell below the current price, as it suggests they were happy with a lower valuation. However, while insider selling can be daunting at times, this is only a weak signal. It should be noted that this sale represented only 7.0% of Steven Hudson’s stake.
Fortunately, we note that in the past year, insiders paid C $ 3.1 million for 359.67,000 shares. But they sold 900,000 shares for C $ 7.4 million. The chart below shows insider trading (by companies and individuals) over the past year. If you click on the chart you can see all of the individual trades including the stock price, individual and date!
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Looking at the total insider stakes in a company can help you determine if they are aligned with common shareholders. Strong insider ownership often makes company management more concerned with the interests of shareholders. ECN Capital insiders own around C $ 188 million in shares (or 7.2% of the company). I like to see this level of insider ownership because it increases the chances that management is thinking in the best interests of shareholders.
What might insider trading at ECN Capital tell us?
It’s good to see the recent insider buy. On the other hand, the transaction history, over the past year, is not that positive. Overall, we would prefer to see a more sustained buy from directors, but with significant insider participation and more recent buys, ECN Capital insiders are reasonably well aligned and optimistic for the future. So these insider trading can help us build a stock thesis, but it’s also worth knowing the risks this business faces. When we did our research we found 3 warning signs for ECN Capital (2 cannot be ignored!) Which we believe deserve your full attention.
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For the purposes of this article, insiders are the persons who report their transactions to the relevant regulatory body. We currently account for open market transactions and private assignments, but not derivative transactions.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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