We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Alpha Pro Tech, Ltd. (NYSEMKT:APT).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year’.
The Last 12 Months Of Insider Transactions At Alpha Pro Tech
The Investor Relations & Director, Donna Millar, made the biggest insider sale in the last 12 months. That single transaction was for US$14m worth of shares at a price of US$38.13 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It’s of some comfort that this sale was conducted at a price well above the current share price, which is US$12.66. So it is hard to draw any strong conclusion from it.
Insiders in Alpha Pro Tech didn’t buy any shares in the last year. 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!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Alpha Pro Tech
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Alpha Pro Tech insiders own about US$17m worth of shares. That equates to 9.6% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Alpha Pro Tech Insiders?
The fact that there have been no Alpha Pro Tech insider transactions recently certainly doesn’t bother us. Still, the insider transactions at Alpha Pro Tech in the last 12 months are not very heartening. But it’s good to see that insiders own shares in the company. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Alpha Pro Tech. Case in point: We’ve spotted 2 warning signs for Alpha Pro Tech you should be aware of.
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, but not derivative transactions.
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