Some Applied Industrial Technologies, Inc. (NYSE:AIT) shareholders may be a little concerned to see that the President, Neil Schrimsher, recently sold a substantial US$749k worth of stock at a price of US$202 per share. However, that sale only accounted for 1.8% of their holding, so arguably it doesn't say much about their conviction.
The Last 12 Months Of Insider Transactions At Applied Industrial Technologies
Notably, that recent sale by President Neil Schrimsher was not the only time they sold Applied Industrial Technologies shares this year. Earlier in the year, they fetched US$170 per share in a -US$16m sale. That means that even when the share price was below the current price of US$203, an insider wanted to cash in some shares. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. However, while insider selling is sometimes discouraging, it's only a weak signal. This single sale was just 32% of Neil Schrimsher's stake.
Applied Industrial Technologies insiders didn't buy any shares over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
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Insider Ownership Of Applied Industrial Technologies
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Applied Industrial Technologies insiders own about US$113m worth of shares (which is 1.4% 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.
So What Does This Data Suggest About Applied Industrial Technologies Insiders?
An insider sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. But since Applied Industrial Technologies is profitable and growing, we're not too worried by this. 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 Applied Industrial Technologies. In terms of investment risks, we've identified 1 warning sign with Applied Industrial Technologies and understanding this should be part of your investment process.
Of course Applied Industrial Technologies 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.