President of Eastern Hemisphere Of Enerflex Sold 35% Of Their Shares

Some Enerflex Ltd. (TSE:EFX) shareholders may be a little concerned to see that the President of Eastern Hemisphere, Philip A. Pyle, recently sold a substantial CA$984k worth of stock at a price of CA$32.74 per share. That sale reduced their total holding by 35% which is hardly insignificant, but far from the worst we've seen.

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Enerflex Insider Transactions Over The Last Year

The Independent Director, Juan Villegas, made the biggest insider sale in the last 12 months. That single transaction was for CA$1.4m worth of shares at a price of CA$19.10 each. That means that even when the share price was below the current price of CA$26.44, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was 100% of Juan Villegas's holding.

In the last twelve months insiders purchased 52.21k shares for CA$1.2m. But they sold 116.86k shares for CA$2.8m. All up, insiders sold more shares in Enerflex than they bought, over the last year. They sold for an average price of about US$23.56. It's not too encouraging to see that insiders have sold at below the current price. But we wouldn't put too much weight on the insider selling. You can see the insider transactions (by companies and 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!

See our latest analysis for Enerflex

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Does Enerflex 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. Insiders own 0.5% of Enerflex shares, worth about CA$16m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About Enerflex Insiders?

Unfortunately, there has been more insider selling of Enerflex stock, than buying, in the last three months. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While it's good to be aware of 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. While conducting our analysis, we found that Enerflex has 3 warning signs and it would be unwise to ignore these.

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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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