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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 Axon Enterprise, Inc. (NASDAQ:AAXN), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Axon Enterprise Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by Co-Founder Patrick Smith for US$7.6m worth of shares, at about US$53.00 per share. That means that an insider was selling shares at around the current price of US$51.01. 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 Axon Enterprise shares, than buying. The sellers received a price of around US$49.19, on average. We don’t gain confidence from insider selling below the recent share price. Of course, the sales could be motivated for a multitude of reasons, so we shouldn’t jump to conclusions. 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!
Axon Enterprise is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Axon Enterprise Have Bought Stock Recently
It’s good to see that Axon Enterprise insiders have made notable investments in the company’s shares. Specifically, Jawad Ahsan bought US$99k worth of shares in that time, and we didn’t record any sales whatsoever. This is a positive in our book as it implies some confidence.
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. I reckon it’s a good sign if insiders own a significant number of shares in the company. Insiders own 2.3% of Axon Enterprise shares, worth about US$68m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
What Might The Insider Transactions At Axon Enterprise Tell Us?
It is good to see recent insider purchase. But we can’t say the same for the transactions over the last 12 months. We don’t take much heart from transactions by Axon Enterprise insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. Overall they seem reasonably aligned. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Axon Enterprise.
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 email@example.com.