While it's been a great week for Alignment Healthcare, Inc. (NASDAQ:ALHC) shareholders after stock gained 21%, they should consider it with a grain of salt. Although prices were relatively low, insiders chose to sell US$6.0m worth of stock in the past 12 months. This could be a sign of impending weakness.

Although we don't think shareholders should simply follow insider transactions, we would consider it foolish to ignore insider transactions altogether.

Alignment Healthcare Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Chief Financial Officer, Robert Freeman, sold US$1.1m worth of shares at a price of US$10.01 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$14.15. 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. We note that the biggest single sale was only 12% of Robert Freeman's holding.

In total, Alignment Healthcare insiders sold more than they bought over the last year. 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!

I will like Alignment Healthcare better if I see some big insider buys. While we wait, check out this free list of undervalued and small cap stocks with considerable, recent, insider buying.

Alignment Healthcare Insiders Are Selling The Stock

The last quarter saw substantial insider selling of Alignment Healthcare shares. In total, insiders sold US$1.4m worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.

Does Alignment Healthcare Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. We usually like to see fairly high levels of insider ownership. It's great to see that Alignment Healthcare insiders own 5.0% of the company, worth about US$128m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

What Might The Insider Transactions At Alignment Healthcare Tell Us?

Insiders sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. 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 Alignment Healthcare. At Simply Wall St, we found 3 warning signs for Alignment Healthcare that deserve your attention before buying any shares.

Of course Alignment Healthcare 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.