We often see insiders buying up shares in companies that perform well over the long term. 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 A.H. Belo Corporation (NYSE:AHC), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.
The Last 12 Months Of Insider Transactions At A.H. Belo
Chairman Robert Decherd made the biggest insider purchase in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$4.00 each. That means that even when the share price was higher than US$2.88 (the recent price), an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 323.39k shares worth US$1.3m. But they sold 252416 for US$1.0m. In the last twelve months there was more buying than selling by A.H. Belo insiders. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
A.H. Belo Insiders Bought Stock Recently
At A.H. Belo,over the last quarter, we have observed quite a lot more insider buying than insider selling. In total, Chairman Robert Decherd bought US$1.1m worth of shares in that time. But Director James Moroney sold shares worth US$794k. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of A.H. Belo
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Our data indicates that A.H. Belo insiders own about US$7.4m worth of shares (which is 12% of the company). We do generally prefer see higher levels of insider ownership.
So What Do The A.H. Belo Insider Transactions Indicate?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on A.H. Belo stock. Along with insider transactions, I recommend checking if A.H. Belo is growing revenue. This free chart of historic revenue and earnings should make that easy.
But note: A.H. Belo 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.
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.
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