Anyone interested in Avnet, Inc. (NASDAQ:AVT) should probably be aware that the Independent Director, James Lawrence, recently divested US$329k worth of shares in the company, at an average price of US$47.68 each. The eyebrow raising move amounted to a reduction of 46% in their holding.
Check out our latest analysis for Avnet
Avnet Insider Transactions Over The Last Year
Notably, that recent sale by Independent Director James Lawrence was not the only time they sold Avnet shares this year. Earlier in the year, they fetched US$41.69 per share in a -US$3.0m sale. That means that an insider was selling shares at slightly below the current price (US$47.29). 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. We note that the biggest single sale was 83% of James Lawrence's holding.
James Lawrence sold a total of 79.76k shares over the year at an average price of US$42.21. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Avnet better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insider Ownership
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Avnet insiders own 0.4% of the company, worth about US$17m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Avnet Tell Us?
An insider sold stock recently, but they haven't been buying. And even if we look at the last year, we didn't see any purchases. But it is good to see that Avnet is growing earnings. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 3 warning signs for Avnet you should be aware of, and 2 of them don't sit too well with us.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that 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 account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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