Some Advanced Drainage Systems, Inc. (NYSE:WMS) shareholders may be a little concerned to see that the Executive Vice President of Sales, Michael Huebert, recently sold a substantial US$1.7m worth of stock at a price of US$173 per share. That sale reduced their total holding by 22% which is hardly insignificant, but far from the worst we've seen.
The Last 12 Months Of Insider Transactions At Advanced Drainage Systems
In fact, the recent sale by Executive Vice President of Sales Michael Huebert was not their only sale of Advanced Drainage Systems shares this year. Earlier in the year, they fetched US$138 per share in a -US$1.9m sale. So it's clear an insider wanted to take some cash off the table, even below the current price of US$164. 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. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. It is worth noting that this sale was only 21% of Michael Huebert's holding.
Insiders in Advanced Drainage Systems didn't buy any shares in the last year. The chart below shows insider transactions (by companies and 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!
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Insider Ownership Of Advanced Drainage Systems
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. Advanced Drainage Systems insiders own about US$193m worth of shares (which is 1.5% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Advanced Drainage Systems Insider Transactions Indicate?
Insiders haven't bought Advanced Drainage Systems stock in the last three months, but there was some selling. And there weren't any purchases to give us comfort, over the last year. But it is good to see that Advanced Drainage Systems is growing earnings. The company boasts high insider ownership, but we're a little hesitant, given the history of share sales. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Advanced Drainage Systems. Every company has risks, and we've spotted 2 warning signs for Advanced Drainage Systems you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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 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.