It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in ALS Limited (ASX:ALQ).
What Is Insider Buying?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
ALS Insider Transactions Over The Last Year
The Independent Non-Executive Director, Charles Sartain, made the biggest insider sale in the last 12 months. That single transaction was for AU$270k worth of shares at a price of AU$9.01 each. So what is clear is that an insider saw fit to sell at around the current price of AU$8.09. While we don’t usually like to see insider selling, it’s more concerning if the sales take price at a lower price. In this case, the big sale took place at around the current price, so it’s not too bad (but it’s still not a positive). Charles Sartain was the only individual insider to sell over the last year. Notably Charles Sartain was also the biggest buyer, having purchased AU$149k worth of shares.
The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of ALS
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Our data suggests ALS insiders own 0.1% of the company, worth about AU$4.2m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At ALS Tell Us?
There haven’t been any insider transactions in the last three months — that doesn’t mean much. The insider transactions at ALS are not inspiring us to buy. And usually insiders own more stock in the company, according to our data. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
But note: ALS 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.