We wouldn't blame Align Technology, Inc. (NASDAQ:ALGN) shareholders if they were a little worried about the fact that George Morrow, the Independent Director recently netted about US$9.4m selling shares at an average price of US$625. That's a big disposal, and it decreased their holding size by 48%, which is notable but not too bad.
The Last 12 Months Of Insider Transactions At Align Technology
In the last twelve months, the biggest single sale by an insider was when the President, Joseph Hogan, sold US$37m worth of shares at a price of US$474 per share. That means that even when the share price was below the current price of US$615, an insider wanted to cash in some shares. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 41% of Joseph Hogan's stake.
Align Technology insiders didn't buy any shares over the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Does Align Technology Boast High 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. We usually like to see fairly high levels of insider ownership. Align Technology insiders own 3.8% of the company, currently worth about US$1.9b based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Align Technology Insider Transactions Indicate?
Insiders haven't bought Align Technology stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But it is good to see that Align Technology is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 4 warning signs for Align Technology (of which 2 are a bit unpleasant!) you should know about.
But note: Align Technology 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, but not derivative transactions.
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