It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we’d be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Aristocrat Leisure Limited (ASX:ALL), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
Aristocrat Leisure Insider Transactions Over The Last Year
CEO, MD & Director Trevor Croker made the biggest insider sale in the last 12 months. That single transaction was for AU$2.3m worth of shares at a price of AU$22.59 each. That means that an insider was selling shares at slightly below the current price (AU$23.25). Even though it doesn’t necessarily mean anything, that’s certainly not a positive sign, in our book. When an insider sells below the current price, it does tend to make us wonder about the current valuation. We note that the biggest single sale was only 28.1% of Trevor Croker’s holding. Trevor Croker was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid AU$447k for 18.05k shares. But insiders sold 100.00k shares worth AU$2.3m. The chart below shows insider transactions (by individuals) over the last year. 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 alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Aristocrat Leisure Insiders Bought Stock Recently
It’s good to see that Aristocrat Leisure insiders have made notable investments in the company’s shares. In total, insiders bought AU$194k worth of shares in that time, and we didn’t record any sales whatsoever. This makes one think the business has some good points.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Aristocrat Leisure insiders own about AU$20m worth of shares. That equates to 0.1% 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 Aristocrat Leisure Insiders?
It is good to see recent purchasing. On the other hand the transaction history, over the last year, isn’t so positive. While recent transactions indicate confidence in Aristocrat Leisure, insiders don’t own enough of the company to overcome our cautiousness about the longer term transactions. Overall they seem reasonably aligned. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.