Several ALX Oncology Holdings Insiders Sell Shares Sending Potential Negative Signal

A number of ALX Oncology Holdings Inc. (NASDAQ:ALXO) insiders sold their shares in the last year, which may have raised concerns among investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.

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.

View our latest analysis for ALX Oncology Holdings

The Last 12 Months Of Insider Transactions At ALX Oncology Holdings

The Founder, Jaume Pons, made the biggest insider sale in the last 12 months. That single transaction was for US$108k worth of shares at a price of US$15.04 each. That means that even when the share price was below the current price of US$15.36, an insider wanted to cash in some shares. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 1.4% of Jaume Pons's stake.

In total, ALX Oncology Holdings insiders sold more than they bought over the last year. 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!

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ALX Oncology Holdings Insiders Bought Stock Recently

Over the last three months, we've seen a bit of insider buying at ALX Oncology Holdings. CEO & Director Jason Lettmann bought US$50k worth of shares in that time. It's good to see the insider buying, as well as the lack of recent sellers. But in this case the amount purchased means the recent transaction may not be very meaningful on its own.

Insider Ownership Of ALX Oncology Holdings

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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. ALX Oncology Holdings insiders own about US$18m worth of shares. That equates to 2.1% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Does This Data Suggest About ALX Oncology Holdings Insiders?

Our data shows a little insider buying, but no selling, in the last three months. That said, the purchases were not large. Our analysis of ALX Oncology Holdings insider transactions leaves us cautious. But we do like the fact that insiders own a fair chunk of the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ALX Oncology Holdings. To help with this, we've discovered 4 warning signs (1 is potentially serious!) that you ought to be aware of before buying any shares in ALX Oncology Holdings.

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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.