Insider Stock Buying Reaches AU$891k On ALS
When a single insider purchases stock, it is typically not a major deal. However, when multiple insiders purchase stock, like in ALS Limited's (ASX:ALQ) instance, it's good news for shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for ALS
ALS Insider Transactions Over The Last Year
The Independent Chairman Bruce Phillips made the biggest insider purchase in the last 12 months. That single transaction was for AU$584k worth of shares at a price of AU$11.68 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$11.16). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months ALS insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insiders At ALS Have Bought Stock Recently
Over the last quarter, ALS insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought AU$604k worth of shares. This is a positive in our book as it implies some confidence.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, ALS insiders have about 0.1% of the stock, worth approximately AU$6.5m. However, it's possible that insiders might have an indirect interest through a more complex structure. We prefer to see high levels of insider ownership.
What Might The Insider Transactions At ALS Tell Us?
It's certainly positive to see the recent insider purchases. And the longer term insider transactions also give us confidence. While the overall levels of insider ownership are below what we'd like to see, the history of transactions imply that ALS insiders are reasonably well aligned, and optimistic for the future. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing ALS. In terms of investment risks, we've identified 2 warning signs with ALS and understanding these should be part of your investment process.
But note: ALS may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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