Alliance Data Systems Corporation (NYSE:ADS) insiders made a handsome profit after selling stock presently valued at US$62.53 apiece for US$125

By
Simply Wall St
Published
March 21, 2022
NYSE:BFH
Source: Shutterstock

Even though Alliance Data Systems Corporation (NYSE:ADS) stock gained 13% last week, insiders who sold US$145k worth of stock over the past year are probably better off. Selling at an average price of US$125, which is higher than the current price might have been the right call as holding on to stock would have meant their investment would be worth less now than it was at the time of sale.

While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.

See our latest analysis for Alliance Data Systems

Alliance Data Systems Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the insider, Laura Santillan, sold US$145k worth of shares at a price of US$125 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$62.53. So it is hard to draw any strong conclusion from it. Laura Santillan was the only individual insider to sell 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 click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

insider-trading-volume
NYSE:ADS Insider Trading Volume March 21st 2022

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insider Ownership

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It appears that Alliance Data Systems insiders own 0.3% of the company, worth about US$11m. 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 Do The Alliance Data Systems Insider Transactions Indicate?

The fact that there have been no Alliance Data Systems insider transactions recently certainly doesn't bother us. Still, the insider transactions at Alliance Data Systems in the last 12 months are not very heartening. But we do like the fact that insiders own a fair chunk of the company. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 2 warning signs for Alliance Data Systems and we suggest you have a look.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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