Accel Entertainment Insiders Sell US$6.0m Of Stock, Possibly Signalling Caution

The fact that multiple Accel Entertainment, Inc. (NYSE:ACEL) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

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 Accel Entertainment

Accel Entertainment Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Vice Chairman of the Board & Co-Founder, Gordon Rubenstein, for US$3.3m worth of shares, at about US$10.60 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$11.98. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 14% of Gordon Rubenstein's holding.

Insiders in Accel Entertainment 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!

I will like Accel Entertainment better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insiders At Accel Entertainment Have Sold Stock Recently

Over the last three months, we've seen a bit of insider selling at Accel Entertainment. Independent Director David Ruttenberg sold just US$45k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.

Does Accel Entertainment 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. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Accel Entertainment insiders own 13% of the company, worth about US$122m. 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 Accel Entertainment Tell Us?

While there has not been any insider buying in the last three months, there has been selling. But given the selling was modest, we're not worried. While we feel good about high insider ownership of Accel Entertainment, 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. You'd be interested to know, that we found 1 warning sign for Accel Entertainment and we suggest you have a look.

But note: Accel Entertainment 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.

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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.