Those following along with American Airlines Group Inc. (NASDAQ:AAL) will no doubt be intrigued by the recent purchase of shares by John Cahill, Lead Independent Director of the company, who spent a stonking US$628k on stock at an average price of US$25.14. Aside from being a solid chunk in its own right, the deft move also saw their holding increase by some 26%.
American Airlines Group Insider Transactions Over The Last Year
Chairman & CEO William Parker made the biggest insider purchase in the last 12 months. That single transaction was for US$1.4m worth of shares at a price of US$28.09 each. So it’s clear an insider wanted to buy, even at a higher price than the current share price (being US$20.60). Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it’s very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
Happily, we note that in the last year insiders paid US$4.2m for 151.50k shares. But they sold 6930 shares for US$202k. Overall, American Airlines Group insiders were net buyers last year. The chart below shows insider transactions (by 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!
American Airlines Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of American Airlines Group
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. American Airlines Group insiders own 1.4% of the company, currently worth about US$126m based on the recent share price. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Does This Data Suggest About American Airlines Group Insiders?
It’s certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest American Airlines Group insiders are well aligned, and quite possibly think the share price is too low. That’s what I like to see! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for American Airlines Group.
Of course American Airlines Group 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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