Insider Sellers Might Regret Selling AMMO Shares at a Lower Price Than Current Market Value

Even though AMMO, Inc. (NASDAQ:POWW) has fallen by 11% over the past week , insiders who sold US$1.1m worth of stock over the past year have had less luck. The average selling price of US$2.46 is still lower than the current share price, or in other words, insiders would have been better off holding on to their shares.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for AMMO

The Last 12 Months Of Insider Transactions At AMMO

Over the last year, we can see that the biggest insider sale was by the Founder & Executive Chairman of Board, Fred Wagenhals, for US$537k worth of shares, at about US$2.43 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$1.36). So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Fred Wagenhals.

Fred Wagenhals sold a total of 450.00k shares over the year at an average price of US$2.46. 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!

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Does AMMO 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. We usually like to see fairly high levels of insider ownership. Insiders own 27% of AMMO shares, worth about US$45m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At AMMO Tell Us?

It doesn't really mean much that no insider has traded AMMO shares in the last quarter. We don't take much encouragement from the transactions by AMMO insiders. But it's good to see that insiders own shares in the company. 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. For example - AMMO has 1 warning sign we think you should be aware of.

Of course AMMO 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.