The fact that multiple Acadia Healthcare Company, Inc. (NASDAQ:ACHC) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. When analyzing insider transactions, it is usually more valuable to know whether insiders are buying versus knowing if they are selling, as the latter sends an ambiguous message. However, if numerous insiders are selling, shareholders should investigate more.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
See our latest analysis for Acadia Healthcare Company
Acadia Healthcare Company Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Executive Vice President of Operations, John Hollinsworth, sold US$4.8m worth of shares at a price of US$74.00 per share. So we know that an insider sold shares at around the present share price of US$73.86. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. In this case, the big sale took place at around the current price, so it's not too bad (but it's still not a positive).
Acadia Healthcare Company 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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Acadia Healthcare Company Insiders Are Selling The Stock
The last three months saw significant insider selling at Acadia Healthcare Company. In total, insiders dumped US$10m worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. We usually like to see fairly high levels of insider ownership. Acadia Healthcare Company insiders own about US$193m worth of shares (which is 2.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
So What Do The Acadia Healthcare Company Insider Transactions Indicate?
Insiders sold Acadia Healthcare Company shares recently, but they didn't buy any. Looking to the last twelve months, our data doesn't show any insider buying. While insiders do own a lot of shares in the company (which is good), our analysis of their transactions doesn't make us feel confident about the company. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Acadia Healthcare Company. Case in point: We've spotted 2 warning signs for Acadia Healthcare Company you should be aware of.
Of course Acadia Healthcare Company 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.