Selling AU$1.1m Of AML3D Stock Rewarded Insiders

Despite a 14% gain in AML3D Limited's (ASX:AL3) stock price this week, shareholders shouldn't let up. Even though stock prices were relatively low, insiders elected to sell AU$1.1m worth of stock in the last year, which could indicate some expected downturn.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for AML3D

The Last 12 Months Of Insider Transactions At AML3D

In the last twelve months, the biggest single sale by an insider was when the CTO & Director, Andrew Michael Sales, sold AU$1.1m worth of shares at a price of AU$0.15 per share. That means that even when the share price was below the current price of AU$0.20, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 21% of Andrew Michael Sales's stake. Andrew Michael Sales was the only individual insider to sell over the last year.

The chart below shows insider transactions (by companies and 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!

I will like AML3D better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Does AML3D 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. We usually like to see fairly high levels of insider ownership. Insiders own 8.1% of AML3D shares, worth about AU$8.8m, according to our data. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. We do generally prefer see higher levels of insider ownership.

So What Do The AML3D Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. The insider transactions at AML3D are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Case in point: We've spotted 5 warning signs for AML3D you should be aware of, and 2 of these are a bit unpleasant.

But note: AML3D may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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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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.