Who Has Been Selling ADDvantage Technologies Group, Inc. (NASDAQ:AEY) Shares?

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in ADDvantage Technologies Group, Inc. (NASDAQ:AEY).

Do Insider Transactions Matter?

It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.

Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.

View our latest analysis for ADDvantage Technologies Group

ADDvantage Technologies Group Insider Transactions Over The Last Year

The insider, Susan Chymiak, made the biggest insider sale in the last 12 months. That single transaction was for US$756k worth of shares at a price of US$3.03 each. That means that an insider was selling shares at around the current price of US$2.58. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.

Over the last year we saw more insider selling of ADDvantage Technologies Group shares, than buying. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

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ADDvantage Technologies Group Insiders Are Selling The Stock

Over the last three months, we've seen significant insider selling at ADDvantage Technologies Group. In total, insiders sold US$1.5m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Insider Ownership of ADDvantage Technologies Group

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. ADDvantage Technologies Group insiders own 62% of the company, currently worth about US$17m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Does This Data Suggest About ADDvantage Technologies Group Insiders?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 5 warning signs for ADDvantage Technologies Group you should be aware of, and 2 of these are a bit unpleasant.

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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