We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Booz Allen Hamilton Holding Corporation (NYSE:BAH).
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, 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 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.’
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The Last 12 Months Of Insider Transactions At Booz Allen Hamilton Holding
In the last twelve months, the biggest single sale by an insider was when Chief People Officer and Executive VP Elizabeth Thompson sold US$712k worth of shares at a price of US$47.49 per share. That means that even when the share price was slightly below the current price of US$47.99, an insider wanted to cash in some shares. While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. We note that the biggest single sale was 56.6% of Elizabeth Thompson’s holding.
We note that in the last year insiders divested 23.02k shares for a total of US$1.1m. All up, insiders sold more shares in Booz Allen Hamilton Holding than they bought, over the last year. The sellers received a price of around US$47.93, on average. It’s not particularly great to see insiders were selling shares around current prices. While some insiders have decided to take some money off the table, we wouldn’t put too much weight on this fact. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership of Booz Allen Hamilton Holding
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. Booz Allen Hamilton Holding insiders own 2.4% of the company, currently worth about US$161m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Booz Allen Hamilton Holding Insider Transactions Indicate?
The fact that there have been no Booz Allen Hamilton Holding insider transactions recently certainly doesn’t bother us. While we feel good about high insider ownership of Booz Allen Hamilton Holding, we can’t say the same about the selling of shares. Of course, the future is what matters most. So if you are interested in Booz Allen Hamilton Holding, you should check out this free report on analyst forecasts for the company.
But note: Booz Allen Hamilton Holding 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.
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 firstname.lastname@example.org.