We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Atlas Arteria Limited (ASX:ALX), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
The Last 12 Months Of Insider Transactions At Atlas Arteria
In the last twelve months, the biggest single sale by an insider was when the MD, CEO & Director, Graeme Bevans, sold AU$234k worth of shares at a price of AU$6.53 per share. That means that an insider was selling shares at around the current price of AU$6.40. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign. Graeme Bevans was the only individual insider to sell shares in the last twelve months.
Over the last year, we can see that insiders have bought 140.99k shares worth AU$929k. But they sold 35.82k shares for AU$234k. In total, Atlas Arteria insiders bought more than they sold over 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!
Atlas Arteria is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Atlas Arteria Have Bought Stock Recently
We saw some Atlas Arteria insider buying shares in the last three months. Independent Non-Executive Director Jean-Georges Malcor bought AU$30k worth of shares in that time. It's great to see that insiders are only buying, not selling. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. From looking at our data, insiders own AU$3.5m worth of Atlas Arteria stock, about 0.06% of the company. We consider this fairly low insider ownership.
What Might The Insider Transactions At Atlas Arteria Tell Us?
Our data shows a little insider buying, but no selling, in the last three months. Overall the buying isn't worth writing home about. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if Atlas Arteria insiders bought more shares in the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. When we did our research, we found 2 warning signs for Atlas Arteria (1 makes us a bit uncomfortable!) that we believe deserve your full attention.
Of course Atlas Arteria 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.
When trading Atlas Arteria or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
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. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.