It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Alaska Communications Systems Group, Inc. (NASDAQ:ALSK).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Alaska Communications Systems Group Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Karen Singer for US$188k worth of shares, at about US$1.71 per share. That means that an insider was happy to buy shares at around the current price of US$1.73. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. In this case we're pleased to report that the insider purchases were made at close to current prices.
Happily, we note that in the last year insiders bought 114k shares for a total of US$193k. In the last twelve months Alaska Communications Systems Group insiders were buying shares, but not selling. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
Insider Ownership of Alaska Communications Systems 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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 12% of Alaska Communications Systems Group shares, worth about US$12m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Alaska Communications Systems Group Insiders?
It doesn't really mean much that no insider has traded Alaska Communications Systems Group shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Overall we don't see anything to make us think Alaska Communications Systems Group insiders are doubting the company, and they do own shares. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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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, but not derivative transactions.
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