It is usually uneventful when a single insider buys stock. However, When quite a few insiders buy shares, as it happened in Alliance Entertainment Holding Corporation’s (NASDAQ:AENT) case, it’s fantastic news for shareholders.
Although we don’t think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.
In the last twelve months, the biggest single purchase by an insider was when CEO & Director Jeffrey Walker bought US$269k worth of shares at a price of US$3.93 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$6.81. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn’t tell us much about what they think of current prices.
Alliance Entertainment Holding insiders may have bought shares in the last year, but they didn’t sell any. You can see the insider transactions (by companies and 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!
See our latest analysis for Alliance Entertainment Holding
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
For a common shareholder, it is worth checking how many shares are held by company 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. It’s great to see that Alliance Entertainment Holding insiders own 77% of the company, worth about US$280m. This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
The fact that there have been no Alliance Entertainment Holding insider transactions recently certainly doesn’t bother us. But insiders have shown more of an appetite for the stock, over the last year. With high insider ownership and encouraging transactions, it seems like Alliance Entertainment Holding insiders think the business has merit. In addition to knowing about insider transactions going on, it’s beneficial to identify the risks facing Alliance Entertainment Holding. At Simply Wall St, we’ve found that Alliance Entertainment Holding has 2 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.
But note: Alliance Entertainment 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.
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 of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.