Applied Digital Corporation (NASDAQ:APLD) drops to US$148m and insiders who purchased earlier this year lose another US$91k
The recent 17% drop in Applied Digital Corporation's (NASDAQ:APLD) stock could come as a blow to insiders who purchased US$220k worth of stock at an average buy price of US$2.71 over the past 12 months. Insiders purchase with the hope of seeing their investments increase in value over time. However, due to recent losses, their initial investment is now only worth US$129k, which is not great.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Check out our latest analysis for Applied Digital
The Last 12 Months Of Insider Transactions At Applied Digital
Over the last year, we can see that the biggest insider purchase was by Independent Director Virginia Moore for US$115k worth of shares, at about US$2.29 per share. That means that an insider was happy to buy shares at above the current price of US$1.59. 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. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months insiders purchased 81.22k shares for US$220k. On the other hand they divested 39.50k shares, for US$80k. Overall, Applied Digital insiders were net buyers during the last year. Their average price was about US$2.71. This is nice to see since it implies that insiders might see value around current prices. 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!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Applied Digital Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Applied Digital shares. In total, insiders sold US$80k 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
For a common shareholder, it is worth checking how many shares are held by company insiders. 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 27% of Applied Digital shares, worth about US$40m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Applied Digital Tell Us?
Insiders sold stock recently, but they haven't been buying. In contrast, they appear keener if you look at the last twelve months. We like that insiders own a fair amount of the company. So the recent selling doesn't worry us too much. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Applied Digital. Be aware that Applied Digital is showing 4 warning signs in our investment analysis, and 2 of those are significant...
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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