We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Ameriprise Financial Inc (NYSE:AMP), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, including certain disclosures.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Ameriprise Financial Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Chief Executive Officer of Global Asset Management William Truscott sold US$5.4m worth of shares at a price of US$174 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$121. So it is hard to draw any strong conclusion from it.
Happily, we note that in the last year insiders paid US$1.5m for 11.13k shares. On the other hand they divested 41.26k shares, for US$7.1m. All up, insiders sold more shares in Ameriprise Financial than they bought, over the last year. The average sell price was around US$172. It is certainly not great to see that insiders have sold shares in the company. But the selling was at much higher prices than the current share price (US$121), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Ameriprise Financial
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 0.4% of Ameriprise Financial shares, worth about US$68m. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Ameriprise Financial Insider Transactions Indicate?
The fact that there have been no Ameriprise Financial insider transactions recently certainly doesn’t bother us. The insider transactions at Ameriprise Financial are not inspiring us to buy. We also note that, as far as we can see, insider ownership is fairly low, compared to other companies. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Ameriprise Financial.
Of course Ameriprise Financial may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.