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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So we’ll take a look at whether insiders have been buying or selling shares in Air Products and Chemicals, Inc. (NYSE:APD).
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, rules govern insider transactions, and certain disclosures are required.
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. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Air Products and Chemicals Insider Transactions Over The Last Year
Chairman Seifollah Ghasemi made the biggest insider purchase in the last 12 months. That single transaction was for US$3.2m worth of shares at a price of US$160 each. Even though the purchase was made at a significantly lower price than the recent price (US$203), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
Happily, we note that in the last year insiders paid US$3.2m for 20200 shares. But insiders sold 2970 shares worth US$615k. In total, Air Products and Chemicals insiders bought more than they sold over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Air Products and Chemicals Insiders Are Selling The Stock
Over the last three months, we’ve seen significant insider selling at Air Products and Chemicals. In total, SVP, Corporate Controller & Principal Accounting Officer Russell Flugel sold US$615k worth of shares in that time, and we didn’t record any purchases whatsoever. Overall this makes us a bit cautious, but it’s not the be all and end all.
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Air Products and Chemicals insiders own about US$115m worth of shares (which is 0.3% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Air Products and Chemicals Tell Us?
An insider hasn’t bought Air Products and Chemicals stock in the last three months, but there was some selling. In contrast, they appear keener if you look at the last twelve months. We are also comforted by the high levels of insider ownership. So we’re not too bothered by recent selling. Of course, the future is what matters most. So if you are interested in Air Products and Chemicals, you should check out this free report on analyst forecasts for the company.
Of course Air Products and Chemicals may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.