We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 we'll take a look at whether insiders have been buying or selling shares in PlayAGS, Inc. (NYSE:AGS).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia 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'.
PlayAGS Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the CEO, President & Director, David Lopez, sold US$129k worth of shares at a price of US$20.98 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$11.10. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid US$393k for 40.38k shares. But they sold 7149 for US$148k. In the last twelve months there was more buying than selling by PlayAGS insiders. You can see a visual depiction of insider transactions (by 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!
PlayAGS is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership of PlayAGS
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. From looking at our data, insiders own US$2.8m worth of PlayAGS stock, about 0.7% of the company. We prefer to see high levels of insider ownership.
So What Do The PlayAGS Insider Transactions Indicate?
There haven't been any insider transactions in the last three months -- that doesn't mean much. However, our analysis of transactions over the last year is heartening. The transactions are fine but it'd be more encouraging if PlayAGS insiders bought more shares in the company. Of course, the future is what matters most. So if you are interested in PlayAGS, you should check out this free report on analyst forecasts for the company.
Of course PlayAGS 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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