For AB Dynamics Insiders, Selling UK£2.0m Of Shares Was A Smart Move

AB Dynamics plc's (LON:ABDP) stock rose 10% last week, but insiders who sold UK£2.0m worth of stock over the last year are probably in a more advantageous position. Selling at an average price of UK£16.25, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While insider transactions are not the most important thing when it comes to long-term investing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for AB Dynamics

The Last 12 Months Of Insider Transactions At AB Dynamics

In the last twelve months, the biggest single sale by an insider was when the insider, Anthony Best, sold UK£2.0m worth of shares at a price of UK£16.25 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£19.15. 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 2.1% of Anthony Best's stake. The only individual insider seller over the last year was Anthony Best.

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!

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It's great to see that AB Dynamics insiders own 25% of the company, worth about UK£110m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At AB Dynamics Tell Us?

There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of AB Dynamics, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing AB Dynamics. You'd be interested to know, that we found 1 warning sign for AB Dynamics and we suggest you have a look.

Of course AB Dynamics 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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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.