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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 before you buy or sell ALX Oncology Holdings Inc. (NASDAQ:ALXO), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
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'.
ALX Oncology Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when insider Robert Adelman bought US$57k worth of shares at a price of US$19.00 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$52.99. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months ALX Oncology Holdings insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
ALX Oncology Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does ALX Oncology Holdings Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that ALX Oncology Holdings insiders own 3.1% of the company, worth about US$66m. 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 ALX Oncology Holdings Tell Us?
It doesn't really mean much that no insider has traded ALX Oncology Holdings shares in the last quarter. However, our analysis of transactions over the last year is heartening. Insiders do have a stake in ALX Oncology Holdings and their transactions don't cause us concern. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 3 warning signs for ALX Oncology Holdings (1 is potentially serious!) and we strongly recommend you look at them before investing.
Of course ALX Oncology Holdings 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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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