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We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Allison Transmission Holdings, Inc. (NYSE:ALSN).
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, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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'.
The Last 12 Months Of Insider Transactions At Allison Transmission Holdings
Over the last year, we can see that the biggest insider sale was by the President, David Graziosi, for US$243k worth of shares, at about US$48.52 per share. So what is clear is that an insider saw fit to sell at around the current price of US$42.43. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive). The only individual insider seller over the last year was David Graziosi.
You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
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).
Allison Transmission Holdings Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Allison Transmission Holdings. We can see that G. Bohley paid US$230k for shares in the company. No-one sold. This is a positive in our book as it implies some confidence.
Does Allison Transmission Holdings Boast High Insider Ownership?
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Allison Transmission Holdings insiders own about US$44m worth of shares. That equates to 0.9% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Allison Transmission Holdings Insiders?
It is good to see the recent insider purchase. On the other hand the transaction history, over the last year, isn't so positive. We don't take much heart from transactions by Allison Transmission Holdings insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. Overall they seem reasonably aligned. Of course, the future is what matters most. So if you are interested in Allison Transmission Holdings, you should check out this free report on analyst forecasts for the company.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.