Insiders might want to re-evaluate their US$2.5m stock purchase as Audacy, Inc. (NYSE:AUD) drops to US$288m

Simply Wall St
February 19, 2022
Source: Shutterstock

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.

Check out our latest analysis for Audacy

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!

NYSE:AUD Insider Trading Volume February 19th 2022

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.

Insider Ownership

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.