This Insider Has Just Sold Shares In a2 Milk

We wouldn't blame The a2 Milk Company Limited (NZSE:ATM) shareholders if they were a little worried about the fact that Li Xiao, the Chief Executive of Greater China recently netted about NZ$1.3m selling shares at an average price of NZ$10.25. That's a big disposal, and it decreased their holding size by 15%, which is notable but not too bad.

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The Last 12 Months Of Insider Transactions At a2 Milk

In fact, the recent sale by Li Xiao was the biggest sale of a2 Milk shares made by an insider individual in the last twelve months, according to our records. So we know that an insider sold shares at around the present share price of NZ$9.65. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

All up, insiders sold more shares in a2 Milk than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

See our latest analysis for a2 Milk

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Insider Ownership Of a2 Milk

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. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.4% of a2 Milk shares, worth about NZ$30m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The a2 Milk Insider Transactions Indicate?

Unfortunately, there has been more insider selling of a2 Milk stock, than buying, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But since a2 Milk is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for a2 Milk you should be aware of.

Of course a2 Milk 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 of direct interests only, but not derivative transactions or indirect interests.

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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.