Have American Equity Investment Life Holding Company (NYSE:AEL) Insiders Been Selling Their Stock?

Simply Wall St
December 01, 2019

We wouldn't blame American Equity Investment Life Holding Company (NYSE:AEL) shareholders if they were a little worried about the fact that Debra Richardson, the Director recently netted about US$536k selling shares at an average price of US$29.77. That's a big dump, and it decreased their holding size by 12%, which is notable but not too bad.

Check out our latest analysis for American Equity Investment Life Holding

The Last 12 Months Of Insider Transactions At American Equity Investment Life Holding

In fact, the recent sale by Director Debra Richardson was not their only sale of American Equity Investment Life Holding shares this year. Earlier in the year, they fetched US$27.40 per share in a -US$2.2m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$29.84. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. It is worth noting that this sale was only 35% of Debra Richardson's holding.

In the last twelve months insiders netted US$3.6m for 130413 shares sold. American Equity Investment Life Holding insiders didn't buy any shares over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:AEL Recent Insider Trading, December 1st 2019
NYSE:AEL Recent Insider Trading, December 1st 2019

I will like American Equity Investment Life Holding better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company 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. American Equity Investment Life Holding insiders own about US$45m worth of shares. That equates to 1.7% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

What Might The Insider Transactions At American Equity Investment Life Holding Tell Us?

An insider hasn't bought American Equity Investment Life Holding stock in the last three months, but there was some selling. And even if we look to the last year, we didn't see any purchases. Insiders own shares, but we're still pretty cautious, given the history of sales. We'd think twice before buying! If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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