Possible bearish signals as Alaska Air Group, Inc. (NYSE:ALK) insiders disposed of US$4.5m worth of stock

By
Simply Wall St
Published
September 10, 2021
NYSE:ALK
Source: Shutterstock

The fact that multiple Alaska Air Group, Inc. (NYSE:ALK) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst 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, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.

View our latest analysis for Alaska Air Group

Alaska Air Group Insider Transactions Over The Last Year

Over the last year, we can see that the biggest insider sale was by the Executive Chairman, Bradley Tilden, for US$735k worth of shares, at about US$68.10 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The silver lining is that this sell-down took place above the latest price (US$56.09). So it is hard to draw any strong conclusion from it.

In total, Alaska Air Group insiders sold more than they bought over the last year. The average sell price was around US$64.49. Insider selling doesn't make us excited to buy. But we note that the selling, on average, was at well above the recently traded price of US$56.09. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, 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:ALK Insider Trading Volume September 11th 2021

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).

Insiders at Alaska Air Group Have Sold Stock Recently

The last three months saw significant insider selling at Alaska Air Group. Specifically, Executive Chairman Bradley Tilden ditched US$860k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Insider Ownership of Alaska Air Group

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. It appears that Alaska Air Group insiders own 0.3% of the company, worth about US$24m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Alaska Air Group Tell Us?

An insider hasn't bought Alaska Air Group stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! 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. When we did our research, we found 2 warning signs for Alaska Air Group (1 is concerning!) that we believe deserve your full attention.

But note: Alaska Air Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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