Stock Analysis

Insiders at Alpha Financial Markets Consulting plc (LON:AFM) sold UK£2.3m worth of stock, a potential red flag that needs to be monitored

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While Alpha Financial Markets Consulting plc (LON:AFM) shareholders have enjoyed a good week with stock up 8.7%, they need remain vigilant. The fact that insiders chose to dispose of UK£2.3m worth of stock in the past 12 months even though prices were relatively low could be indicative of some anticipated weakness.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Alpha Financial Markets Consulting

The Last 12 Months Of Insider Transactions At Alpha Financial Markets Consulting

In the last twelve months, the biggest single sale by an insider was when the Global CEO & Director, Euan N. Fraser, sold UK£2.3m worth of shares at a price of UK£4.00 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of UK£4.62. 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. It is worth noting that this sale was 100% of Euan N. Fraser's holding. The only individual insider seller over the last year was Euan N. Fraser.

You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

AIM:AFM Insider Trading Volume March 15th 2023

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 Alpha Financial Markets Consulting

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. From looking at our data, insiders own UK£3.0m worth of Alpha Financial Markets Consulting stock, about 0.6% of the company. We prefer to see high levels of insider ownership.

So What Do The Alpha Financial Markets Consulting Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Alpha Financial Markets Consulting shares in the last quarter. The insider transactions at Alpha Financial Markets Consulting are not inspiring us to buy. And we're not picking up on high enough insider ownership to give us any comfort. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we found 1 warning sign for Alpha Financial Markets Consulting that deserve your attention before buying any shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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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