Insiders probably made the right decision selling US$23m worth of shares earlier this year as AeroVironment, Inc.'s (NASDAQ:AVAV)) stock dips by 5.5%.

By
Simply Wall St
Published
November 24, 2021
NasdaqGS:AVAV
Source: Shutterstock

By selling US$23m worth of AeroVironment, Inc. (NASDAQ:AVAV) stock at an average sell price of US$115 over the last year, insiders seemed to have made the most of their holdings. After the stock price dropped 5.5% last week, the company's market value declined by US$123m, but insiders were able to mitigate their losses.

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

View our latest analysis for AeroVironment

AeroVironment Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the insider, Timothy Conver, for US$17m worth of shares, at about US$113 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$85.79). So it may not tell us anything about how insiders feel about the current share price.

AeroVironment insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqGS:AVAV Insider Trading Volume November 24th 2021

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does AeroVironment Boast High 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. I reckon it's a good sign if insiders own a significant number of shares in the company. AeroVironment insiders own about US$132m worth of shares (which is 6.2% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

What Might The Insider Transactions At AeroVironment 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 AeroVironment, we can't say the same about the selling of shares. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 1 warning sign for AeroVironment you should know about.

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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