Selling Alpha Metallurgical Resources Shares at a Lower Price Than Current Market Value May Have Been a Costly Mistake for Insiders

Even though Alpha Metallurgical Resources, Inc. (NYSE:AMR) has fallen by 18% over the past week , insiders who sold US$120m worth of stock over the past year have had less luck. Given that the average selling price of US$359 is still lower than the current share price, insiders would probably have been better off keeping their shares.

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 Alpha Metallurgical Resources

The Last 12 Months Of Insider Transactions At Alpha Metallurgical Resources

The President & COO, Jason Whitehead, made the biggest insider sale in the last 12 months. That single transaction was for US$22m worth of shares at a price of US$431 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. It's of some comfort that this sale was conducted at a price well above the current share price, which is US$197. So it is hard to draw any strong conclusion from it.

In the last year Alpha Metallurgical Resources insiders didn't buy any company stock. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

I will like Alpha Metallurgical Resources better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Insider Ownership Of Alpha Metallurgical Resources

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that Alpha Metallurgical Resources insiders own 12% of the company, worth about US$295m. 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 Does This Data Suggest About Alpha Metallurgical Resources Insiders?

It doesn't really mean much that no insider has traded Alpha Metallurgical Resources shares in the last quarter. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of Alpha Metallurgical Resources insider transactions don't fill us with confidence. 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. To that end, you should learn about the 2 warning signs we've spotted with Alpha Metallurgical Resources (including 1 which is significant).

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 of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.