Bullish insiders bet CA$880k on Electric Royalties Ltd. (CVE:ELEC)

Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Electric Royalties Ltd. (CVE:ELEC), it sends a favourable message to the company's shareholders.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Electric Royalties

The Last 12 Months Of Insider Transactions At Electric Royalties

The insider Stefan Gleason made the biggest insider purchase in the last 12 months. That single transaction was for CA$341k worth of shares at a price of CA$0.31 each. That means that even when the share price was higher than CA$0.23 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months Electric Royalties insiders were buying shares, but not selling. They paid about CA$0.28 on average. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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).

Electric Royalties Insiders Bought Stock Recently

Over the last quarter, Electric Royalties insiders have spent a meaningful amount on shares. In total, insiders bought CA$868k worth of shares in that time, and we didn't record any sales whatsoever. This makes one think the business has some good points.

Does Electric Royalties 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Electric Royalties insiders own 19% of the company, worth about CA$4.0m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At Electric Royalties Tell Us?

It is good to see recent purchasing. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest Electric Royalties insiders are well aligned, and that they may think the share price is too low. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. For example, Electric Royalties has 4 warning signs (and 2 which make us uncomfortable) we think you should know about.

Of course Electric Royalties 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, but not derivative transactions.

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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.

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