Should You Be Worried About Insider Transactions At Amphenol Corporation (NYSE:APH)?

We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Amphenol Corporation (NYSE:APH).

What Is Insider Selling?

Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, most countries require that the company discloses such transactions to the market.

We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Colombia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.

Check out our latest analysis for Amphenol

Amphenol Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by Senior VP and Group GM of Military & Aerospace Operations Luc Walter for US$5.4m worth of shares, at about US$77.80 per share. So we know that an insider sold shares at around the present share price of US$75.65. They could have a variety of motivations for selling, but it’s still not particularly encouraging to see. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.

We note that in the last year insiders divested 86.01k shares for a total of US$6.9m. All up, insiders sold more shares in Amphenol than they bought, over the last year. The sellers received a price of around US$80.16, on average. We don’t gain much confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see a visual depiction of insider transactions over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!

NYSE:APH Insider Trading December 25th 18
NYSE:APH Insider Trading December 25th 18

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insider Ownership of Amphenol

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Amphenol insiders own 0.5% of the company, worth about US$112m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.

So What Do The Amphenol Insider Transactions Indicate?

It doesn’t really mean much that no insider has traded Amphenol shares in the last quarter. It’s great to see high levels of insider ownership, but looking back at the last year, we don’t gain confidence from the Amphenol insiders selling. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Amphenol.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.