This Insider Has Just Sold Shares In Advanced Drainage Systems

Some Advanced Drainage Systems, Inc. (NYSE:WMS) shareholders may be a little concerned to see that the Executive Vice President of Market Management, Robert Klein, recently sold a substantial US$711k worth of stock at a price of US$112 per share. However, that sale only accounted for 5.5% of their holding, so arguably it doesn't say much about their conviction.

View our latest analysis for Advanced Drainage Systems

The Last 12 Months Of Insider Transactions At Advanced Drainage Systems

The Executive VP & Chief Administrative Officer, Kevin Talley, made the biggest insider sale in the last 12 months. That single transaction was for US$2.0m worth of shares at a price of US$89.67 each. That means that even when the share price was below the current price of US$113, 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. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 26% of Kevin Talley's holding.

Insiders in Advanced Drainage Systems didn't buy any shares in the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

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

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. A high insider ownership often makes company leadership more mindful of shareholder interests. Advanced Drainage Systems insiders own about US$130m worth of shares (which is 1.5% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Advanced Drainage Systems Tell Us?

Insiders haven't bought Advanced Drainage Systems stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Advanced Drainage Systems is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing 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. Every company has risks, and we've spotted 2 warning signs for Advanced Drainage Systems you should know about.

Of course Advanced Drainage Systems 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.