AAON Sees Insider Stock Selling

Insiders were net sellers of AAON, Inc.'s (NASDAQ:AAON ) stock during the past year. That is, insiders sold more stock than they bought.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

See our latest analysis for AAON

AAON Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Founder, Norman Asbjornson, sold US$6.3m worth of shares at a price of US$63.48 per share. That means that even when the share price was below the current price of US$88.10, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 0.7% of Norman Asbjornson's holding. Norman Asbjornson was the only individual insider to sell shares in the last twelve months.

Norman Asbjornson divested 200.60k shares over the last 12 months at an average price of US$72.14. The chart below shows insider transactions (by companies and individuals) over the last year. 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.

AAON Insiders Are Selling The Stock

The last three months saw significant insider selling at AAON. Specifically, Founder Norman Asbjornson ditched US$7.8m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does AAON Boast High Insider Ownership?

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It's great to see that AAON insiders own 18% of the company, worth about US$1.3b. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Does This Data Suggest About AAON Insiders?

An insider sold AAON shares recently, but they didn't buy any. Zooming out, the longer term picture doesn't give us much comfort. On the plus side, AAON makes money, and is growing profits. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we found 1 warning sign for AAON that deserve your attention before buying any shares.

But note: AAON may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.