Insiders who acquired US$2.5m worth of Audacy, Inc.'s (NYSE:AUD) stock at an average price of US$3.00 in the past 12 months may be dismayed by the recent 10% price decline. Insiders buy with the expectation to see their investments rise in value over a period of time. However, recent losses have rendered their above investment worth US$1.7m which is not ideal.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
The Last 12 Months Of Insider Transactions At Audacy
Over the last year, we can see that the biggest insider purchase was by Chairman Emeritus Joseph Field for US$1.2m worth of shares, at about US$3.16 per share. That means that even when the share price was higher than US$2.11 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels. Notably Joseph Field was also the biggest seller.
Happily, we note that in the last year insiders paid US$2.5m for 824.14k shares. But they sold 599.38k shares for US$2.3m. Overall, Audacy insiders were net buyers during the last year. You can see the insider transactions (by companies and 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Audacy Insiders Are Selling The Stock
Over the last three months, we've seen notably more insider selling, than insider buying, at Audacy. We note Chairman Emeritus Joseph Field cashed in US$1m worth of shares. On the other hand we note Chairman Emeritus Joseph Field bought US$470k worth of shares. We don't view these transactions as a positive sign.
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that Audacy insiders own 18% of the company, worth about US$53m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Audacy Insiders?
Unfortunately, there has been more insider selling of Audacy stock, than buying, in the last three months. But we take heart from prior transactions. We like that insiders own a fair amount of the company. So we're happy enough to look past some selling. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Audacy. In terms of investment risks, we've identified 2 warning signs with Audacy and understanding these should be part of your investment process.
Of course Audacy 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, but not derivative transactions.
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.