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We often see insiders buying up shares in companies that perform well over the long term. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So shareholders might well want to know whether insiders have been buying or selling shares in Albemarle Corporation (NYSE:ALB).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
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. 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 Albemarle
In the last twelve months, the biggest single sale by an insider was when the Executive VP, Karen Narwold, sold US$301k worth of shares at a price of US$97.11 per share. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$68.46. So it may not shed much light on insider confidence at current levels. Karen Narwold was the only individual insider to sell over the last year.
Karen Narwold sold a total of 7495 shares over the year at an average price of US$93.01. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Albemarle Have Bought Stock Recently
It's good to see that Albemarle insiders have made notable investments in the company's shares. DeeAnne Marlow spent US$71k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Albemarle insiders own 0.6% of the company, worth about US$44m. 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 Albemarle Insiders?
The recent insider purchase is heartening. However, the longer term transactions are not so encouraging. The more recent transactions are a positive, but Albemarle insiders haven't shown the sustained enthusiasm that we look for, although they do own a decent number of shares, overall. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in Albemarle, you should check out this free report on analyst forecasts for the company.
Of course Albemarle may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.