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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 The Andersons, Inc. (NASDAQ:ANDE).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
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 Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
Andersons Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Michael Irmen for US$186k worth of shares, at about US$33.45 per share. So we know that an insider sold shares at around the present share price of US$32.67. They might be selling for a variety of reasons, but it's hard to argue this is a bullish sign. Arguably, insider selling at around current prices should give us reason to reflect on whether the stock is fully valued at the moment.
Over the last year we saw more insider selling of Andersons shares, than buying. The average sell price was around US$35.47. It's not particularly great to see insiders were selling shares around current prices. While some insiders have decided to take some money off the table, we wouldn't put too much weight on this fact. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Andersons better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Andersons Have Sold Stock Recently
The last three months saw significant insider selling at Andersons. Specifically, insiders ditched US$239k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the directors think that the shares are a bargain.
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. We usually like to see fairly high levels of insider ownership. It appears that Andersons insiders own 6.9% of the company, worth about US$75m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Do The Andersons Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Andersons.
Of course Andersons may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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 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. Thank you for reading.