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Possible Bearish Signs as Ameriprise Financial Insiders Divest Shares
In the last year, many Ameriprise Financial, Inc. (NYSE:AMP) insiders sold a substantial stake in the company, which may have caught the attention of shareholders. Knowing whether insiders are buying is often more useful when evaluating insider transactions, since insider selling can have several explanations. However, when multiple insiders sell shares during a specific period, shareholders should be aware as this could be a warning sign.
While we would never suggest that investors base their decisions solely on what a company’s directors have done, logic dictates that some attention should be paid to whether insiders are buying or selling shares.
See our latest analysis for Ameriprise Financial
The last 12 months of insider transactions at Ameriprise Financial
Chairman and CEO James Cracchiolo made the biggest insider sale in the last 12 months. This single transaction involved shares worth US$8.9 million, priced at US$409 each. So it’s clear that an insider wanted to take some money off the table, even below the current price of $430. When an insider sells below the current price, it suggests that they considered that lower price to be fair. This makes us wonder what they think of the recent (higher) valuation. While insider selling isn’t a positive sign, we can’t be sure if it means insiders think the stock is fully valued, so it’s only a weak sign. This single sale represented just 12% of James Cracchiolo’s stake.
Ameriprise Financial insiders didn’t buy any shares last year. You can see insider transactions (by companies and individuals) over the last year represented in the chart below. If you want to know exactly who sold, for how much and when, just click on the graph below!
insider trading volume
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Ameriprise Financial Insiders Sold Shares Recently
Over the past three months, we have seen significant insider selling at Ameriprise Financial. In total, insiders sold US$22m worth of shares in that period and we recorded no purchases. Overall, this makes us a little cautious, but that’s not all.
Insider Ownership of Ameriprise Financial
Many investors like to check how much of a company is owned by insiders. I think it’s a good sign if insiders own a significant number of shares in the company. Ameriprise Financial insiders own about $76 million worth of shares. This is equivalent to 0.2% of the company. While this is a strong but not exceptional level of insider ownership, it is enough to indicate some alignment between management and small shareholders.
The story continues
So what does this data suggest about Ameriprise Financial Insiders?
Insiders sold Ameriprise Financial shares recently, but didn’t buy any. And even if we look at last year, we didn’t see any purchases. On the positive side, Ameriprise Financial makes money and grows profits. Although insiders own shares, they don’t own many and are selling. Therefore, we would only buy after careful consideration. So while it’s useful to know what insiders are doing in terms of buying or selling, it’s also useful to know the risks a given company faces. At Simply Wall St, we find 1 Warning Sign for Ameriprise Financial that deserve your attention before buying any stock.
If you would prefer to check out another company – one with potentially superior financials – then don’t miss this opportunity free list of interesting companies, which have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently only account for open market transactions and private dispositions of direct interests, but we do not account for derivative transactions or indirect interests.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your objectives or financial situation. Our goal is to bring you long-term focused analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St has no position in any of the stocks mentioned.