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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 before you buy or sell Ameriprise Financial, Inc. (NYSE:AMP), 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.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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 Ameriprise Financial
Over the last year, we can see that the biggest insider sale was by the Executive VP & Global Chief Investment Officer, Colin Moore, for US$3.2m worth of shares, at about US$134 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$152. As a general rule we consider it to be discouraging when insiders are selling below the current price, because it suggests they were happy with a lower valuation. Please do note, however, that sellers may have a variety of reasons for selling, so we don't know for sure what they think of the stock price. We note that the biggest single sale was only 31.8% of Colin Moore's holding.
Over the last year, we note insiders sold 29192 shares worth US$4.0m. Ameriprise Financial insiders didn't buy any shares 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!
I will like Ameriprise Financial better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Ameriprise Financial Have Sold Stock Recently
The last three months saw significant insider selling at Ameriprise Financial. In total, Executive VP & Chief Information Officer Randy Kupper sold US$776k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Ameriprise Financial Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Ameriprise Financial insiders own about US$83m worth of shares. That equates to 0.4% 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.
What Might The Insider Transactions At Ameriprise Financial Tell Us?
An insider sold Ameriprise Financial shares recently, but they didn't buy any. And there weren't any purchases to give us comfort, over the last year. But since Ameriprise Financial is profitable and growing, we're not too worried by this. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. Of course, the future is what matters most. So if you are interested in Ameriprise Financial, you should check out this free report on analyst forecasts for the company.
Of course Ameriprise Financial 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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If you spot an error that warrants correction, please contact the editor at email@example.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.