Insiders who sold Autoliv, Inc. (NYSE:ALV) earlier this year probably made the right call as market cap dropped by US$308m

By
Simply Wall St
Published
April 10, 2022
NYSE:ALV
Source: Shutterstock

By selling US$196k worth of Autoliv, Inc. (NYSE:ALV) stock at an average sell price of US$88.75 over the last year, insiders seemed to have made the most of their holdings. The company's market worth decreased by US$308m over the past week after the stock price dropped 4.6%, although insiders were able to minimize their losses

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Autoliv

The Last 12 Months Of Insider Transactions At Autoliv

In the last twelve months, the biggest single sale by an insider was when the President of Europe, Frithjof Oldorff, sold US$124k worth of shares at a price of US$88.05 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$73.47). So it may not shed much light on insider confidence at current levels.

In the last year Autoliv insiders didn't buy any company stock. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

insider-trading-volume
NYSE:ALV Insider Trading Volume April 10th 2022

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Autoliv

Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.2% of Autoliv shares, worth about US$15m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

So What Do The Autoliv Insider Transactions Indicate?

There haven't been any insider transactions in the last three months -- that doesn't mean much. Still, the insider transactions at Autoliv in the last 12 months are not very heartening. The modest level of insider ownership is, at least, some 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. While conducting our analysis, we found that Autoliv has 2 warning signs and it would be unwise to ignore these.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.