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 shareholders might well want to know whether insiders have been buying or selling shares in Aramark (NYSE:ARMK).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. 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 Aramark
Over the last year, we can see that the biggest insider purchase was by Chairman Eric Foss for US$3.0m worth of shares, at about US$32.46 per share. That means that an insider was happy to buy shares at around the current price of US$35.82. That means they have been optimistic about the company in the past, though they may have changed their mind. While we always like to see insider buying, it's less meaningful if the purchases were made at much lower prices, as the opportunity they saw may have passed. Happily, the Aramark insiders decided to buy shares at close to current prices.
Over the last year, we can see that insiders have bought 102k shares worth US$3.3m. On the other hand they divested 115k shares, for US$2.6m. In total, Aramark insiders bought more than they sold over the last year. 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!
Aramark is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Aramark
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. Aramark insiders own about US$83m worth of shares. That equates to 0.9% 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 Aramark Insiders?
The fact that there have been no Aramark insider transactions recently certainly doesn't bother us. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Aramark and we see no evidence to suggest they are worried about the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Aramark.
Of course Aramark 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.
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