We wouldn't blame Argan, Inc. (NYSE:AGX) shareholders if they were a little worried about the fact that Rainer Bosselmann, the Director recently netted about US$3.8m selling shares at an average price of US$76.71. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.
Argan Insider Transactions Over The Last Year
Notably, that recent sale by Rainer Bosselmann is the biggest insider sale of Argan shares that we've seen in the last year. That means that an insider was selling shares at below the current price (US$77.60). 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. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 17% of Rainer Bosselmann's stake.
In total, Argan insiders sold more than they bought over the last year. The sellers received a price of around US$55.86, on average. It's not particularly great to see insiders were selling shares at below recent prices. Of course, the sales could be motivated for a multitude of reasons, so we shouldn't jump to conclusions. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. 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
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Argan insiders own about US$57m worth of shares. That equates to 5.5% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Argan Insiders?
Insiders sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. But it is good to see that Argan is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Argan. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Argan.
Of course Argan 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 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com