Advantage Solutions Insiders Added US$1.58m Of Stock To Their Holdings

Usually, when one insider buys stock, it might not be a monumental event. But when multiple insiders are buying like they did in the case of Advantage Solutions Inc. (NASDAQ:ADV), that sends out a positive message to the company's shareholders.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

View our latest analysis for Advantage Solutions

Advantage Solutions Insider Transactions Over The Last Year

The Independent Director Brian Ratzan made the biggest insider purchase in the last 12 months. That single transaction was for US$439k worth of shares at a price of US$2.09 each. Even though the purchase was made at a significantly lower price than the recent price (US$3.15), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.

While Advantage Solutions insiders bought shares during the last year, they didn't sell. Their average price was about US$2.31. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see the insider transactions (by companies and 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!

Advantage Solutions is not the only stock insiders are buying. So take a peek at this free list of under-the-radar companies with insider buying.

Insiders At Advantage Solutions Have Bought Stock Recently

It's good to see that Advantage Solutions insiders have made notable investments in the company's shares. Specifically, CEO & Director David Peacock bought US$112k worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.

Does Advantage Solutions Boast High 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. It appears that Advantage Solutions insiders own 2.0% of the company, worth about US$20m. 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 Advantage Solutions Tell Us?

It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Advantage Solutions we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. In terms of investment risks, we've identified 1 warning sign with Advantage Solutions and understanding it should be part of your investment process.

Of course Advantage Solutions may not be the best stock to buy. So you may wish to see this free collection of high quality 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.

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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.

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