We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Ameriprise Financial, Inc. (NYSE:AMP).
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
The Last 12 Months Of Insider Transactions At Ameriprise Financial
Over the last year, we can see that the biggest insider sale was by Executive VP & Global Chief Investment Officer Colin Moore for US$3.2m worth of shares, at about US$134 per share. So we know that an insider sold shares at around the present share price of US$133. They might be selling for a variety of reasons, but it’s hard to argue this is a bullish sign. We generally tread carefully if insiders have been selling on market, even if they sold slightly above the current price. Colin Moore was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$1.5m for 11.13k shares. But insiders sold 24.03k shares worth US$3.2m. You can see the insider transactions (by individuals) over the last year depicted in the chart 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.
Does Ameriprise Financial Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Insiders own 0.4% of Ameriprise Financial shares, worth about US$72m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Ameriprise Financial Insiders?
An insider sold Ameriprise Financial shares recently, but they didn’t buy any. Zooming out, the longer term picture doesn’t give us much comfort. On the plus side, Ameriprise Financial makes money, and is growing profits. Insider ownership isn’t particularly high, so this analysis makes us cautious about the company. We’re in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Ameriprise Financial.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.