It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Amadeus IT Group, S.A. (BME:AMS).
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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’.
Amadeus IT Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the President, Luis Maroto Camino, for €1.7m worth of shares, at about €70.10 per share. That means that an insider was selling shares at below the current price (€71.40). We generally consider it a negative if insiders have been selling on market, 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. We note that the biggest single sale was only 21.7% of Luis Maroto Camino’s holding. The only individual insider seller over the last year was Luis Maroto Camino.
Luis Maroto Camino ditched 109k shares over the year. The average price per share was €68.64. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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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 0.08% of Amadeus IT Group shares, worth about €25m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Amadeus IT Group Tell Us?
An insider hasn’t bought Amadeus IT Group stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn’t show any insider buying. But since Amadeus IT Group is profitable and growing, we’re not too worried by this. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Amadeus IT Group.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.