It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Ameresco, Inc. (NYSE:AMRC).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
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. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.'
Ameresco Insider Transactions Over The Last Year
The Director, Francis Wisneski, made the biggest insider sale in the last 12 months. That single transaction was for US$88k worth of shares at a price of US$16.00 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$16.49. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. We note that the biggest single sale was only 4.8% of Francis Wisneski's holding. The only individual insider seller over the last year was Francis Wisneski.
Happily, we note that in the last year insiders paid US$83k for 6000 shares. But insiders sold 13516 shares worth US$213k. Francis Wisneski ditched 13516 shares over the year. The average price per share was US$15.73. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Ameresco better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Ameresco insiders own about US$444m worth of shares (which is 58% of the company). I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About Ameresco Insiders?
There haven't been any insider transactions in the last three months -- that doesn't mean much. While we feel good about high insider ownership of Ameresco, we can't say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in Ameresco, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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