We often see insiders buying up shares in companies that perform well over the long term. 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 Atlas Financial Holdings, Inc. (NASDAQ:AFH).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
Atlas Financial Holdings Insider Transactions Over The Last Year
VP & CFO Paul Romano made the biggest insider sale in the last 12 months. That single transaction was for US$300k worth of shares at a price of US$20.10 each. While the sale doesn’t make us feel confident, we do note it was conducted at a price well above the current share price, which is US$9.05. So it may not tell us anything about how insiders feel about the current share price.
All up, insiders sold more shares in Atlas Financial Holdings than they bought, over the last year. The sellers received a price of around US$19.20, on average. 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$9.05), 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Does Atlas Financial Holdings 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Atlas Financial Holdings insiders own 6.8% of the company, currently worth about US$7.4m based on the recent share price. 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 Atlas Financial Holdings Insiders?
It doesn’t really mean much that no insider has traded Atlas Financial Holdings shares in the last quarter. The insider transactions at Atlas Financial Holdings 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. Of course, the future is what matters most. So if you are interested in Atlas Financial Holdings, you should check out this free report on analyst forecasts for the company.
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.
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.