This Insider Has Just Sold Shares In Acadia Healthcare Company, Inc. (NASDAQ:ACHC)

By
Simply Wall St
Published
June 16, 2021
NasdaqGS:ACHC
Source: Shutterstock

We'd be surprised if Acadia Healthcare Company, Inc. (NASDAQ:ACHC) shareholders haven't noticed that the Executive Vice President of Operations, John Hollinsworth, recently sold US$332k worth of stock at US$66.31 per share. However, the silver lining is that the sale only reduced their total holding by 8.2%, so we're hesitant to read anything much into it, on its own.

Check out our latest analysis for Acadia Healthcare Company

The Last 12 Months Of Insider Transactions At Acadia Healthcare Company

In the last twelve months, the biggest single sale by an insider was when the Independent Chairman, Reeve Waud, sold US$6.5m worth of shares at a price of US$59.12 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$64.29. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. It is worth noting that this sale was only 17% of Reeve Waud's holding.

In the last year Acadia Healthcare Company insiders didn't buy any company stock. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

insider-trading-volume
NasdaqGS:ACHC Insider Trading Volume June 17th 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Acadia Healthcare Company

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Acadia Healthcare Company insiders own 1.6% of the company, worth about US$91m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Acadia Healthcare Company Tell Us?

An insider hasn't bought Acadia Healthcare Company stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But since Acadia Healthcare Company is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd practice some caution before buying! So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. At Simply Wall St, we've found that Acadia Healthcare Company has 2 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

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.

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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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. 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.
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