How Many Allied Electronics Corporation Limited (JSE:AEL) Shares Have Insiders Sold, In The Last Year?

We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Allied Electronics Corporation Limited (JSE:AEL).

What Is Insider Selling?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.

Insider transactions are not the most important thing when it comes to long-term investing. 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'.

See our latest analysis for Allied Electronics

The Last 12 Months Of Insider Transactions At Allied Electronics

In the last twelve months, the biggest single sale by an insider was when the Non-Executive Director, Robert Venter, sold R4.0m worth of shares at a price of R19.94 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of R31.80. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. This single sale was just 38% of Robert Venter's stake. The only individual insider seller over the last year was Robert Venter.

You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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 Allied Electronics insiders own 4.0% of the company, worth about R458m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

So What Do The Allied Electronics Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Allied Electronics shares in the last quarter. While we feel good about high insider ownership of Allied Electronics, we can't say the same about the selling of shares. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Allied Electronics. For example - Allied Electronics has 2 warning signs we think you should be aware of.

Of course Allied Electronics may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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