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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 Apollo Medical Holdings, Inc. (NASDAQ:AMEH).
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, rules govern insider transactions, and certain disclosures are required.
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. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Apollo Medical Holdings Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chief Medical Officer, Adrian Vazquez, sold US$575k worth of shares at a price of US$17.23 per share. That means that an insider was selling shares at slightly below the current price (US$17.65). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 6.4% of Adrian Vazquez's stake. Adrian Vazquez was the only individual insider to sell over the last year.
Happily, we note that in the last year insiders paid US$998k for 59.93k shares. But they sold 49.94k shares for US$873k. In total, Apollo Medical Holdings insiders bought more than they sold over the last year. They paid about US$16.66 on average. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Apollo Medical Holdings Insiders Bought Stock Recently
There has been significantly more insider buying, than selling, at Apollo Medical Holdings, over the last three months. In fact, three insiders bought US$638k worth of shares. On the other hand, Chief Medical Officer Adrian Vazquez netted US$250k by selling. The buying outweighs the selling, which suggests that insiders may believe the company will do well in the future.
Insider Ownership of Apollo Medical Holdings
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Apollo Medical Holdings insiders own about US$134m worth of shares (which is 21% of the company). Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Apollo Medical Holdings Tell Us?
It's certainly positive to see the recent insider purchases. And an analysis of the transactions over the last year also gives us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Apollo Medical Holdings. That's what I like to see! So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. To assist with this, we've discovered 2 warning signs that you should run your eye over to get a better picture of Apollo Medical Holdings.
Of course Apollo Medical 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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