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Need To Know: Ameren Corporation (NYSE:AEE) Insiders Have Been Selling Shares

Simply Wall St

We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Ameren Corporation (NYSE:AEE), you may well want to know whether insiders have been buying or selling.

Do Insider Transactions Matter?

It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.

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 Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.

View our latest analysis for Ameren

Ameren Insider Transactions Over The Last Year

The Chief Nuclear Officer & Senior VP of Ameren Missouri, Fadi Diya, made the biggest insider sale in the last 12 months. That single transaction was for US$1.1m worth of shares at a price of US$71.18 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$77.36. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 21% of Fadi Diya's stake.

In the last twelve months insiders netted US$3.5m for 49200 shares sold. Ameren insiders didn't buy any shares over the last year. 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!

NYSE:AEE Recent Insider Trading, November 3rd 2019

I will like Ameren better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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. It appears that Ameren insiders own 0.5% of the company, worth about US$90m. 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 Ameren Insider Transactions Indicate?

The fact that there have been no Ameren insider transactions recently certainly doesn't bother us. Our analysis of Ameren insider transactions leaves us cautious. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Ameren, you should check out this free report on analyst forecasts for the company.

Of course Ameren may not be the best stock to buy. So you may wish to see this free collection of high quality companies.

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.

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 editorial-team@simplywallst.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. Thank you for reading.