Insiders of Acadia Healthcare Company, Inc. (NASDAQ:ACHC) would have made a tidy sum after selling US$4.0m worth of stock at a high price

By
Simply Wall St
Published
March 15, 2022
NasdaqGS:ACHC
Source: Shutterstock

Acadia Healthcare Company, Inc.'s (NASDAQ:ACHC) stock rose 4.4% last week, but insiders who sold US$4.0m worth of stock over the last year are probably in a more advantageous position. Holding on to stock would have meant their investment would be worth less now than it was at the time of sale. Thus selling at an average price of US$66.46, which is higher than the current price, may have been the best decision.

While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.

See our latest analysis for Acadia Healthcare Company

Acadia Healthcare Company Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Independent Chairman, Reeve Waud, sold US$3.7m worth of shares at a price of US$66.47 per share. So we know that an insider sold shares at around the present share price of US$64.23. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.

Acadia Healthcare Company insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NasdaqGS:ACHC Insider Trading Volume March 15th 2022

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

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Acadia Healthcare Company insiders own about US$106m worth of shares (which is 1.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Does This Data Suggest About Acadia Healthcare Company Insiders?

There haven't been any insider transactions in the last three months -- that doesn't mean much. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Acadia Healthcare Company insider transactions don't fill us with confidence. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Acadia Healthcare Company and understanding it should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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, but not derivative transactions.

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