We wouldn't blame Assured Guaranty Ltd. (NYSE:AGO) shareholders if they were a little worried about the fact that Dominic Frederico, the Deputy Chairman recently netted about US$2.1m selling shares at an average price of US$68.50. However, that sale only accounted for 2.0% of their holding, so arguably it doesn't say much about their conviction.
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Assured Guaranty Insider Transactions Over The Last Year
Notably, that recent sale by Deputy Chairman Dominic Frederico was not the only time they sold Assured Guaranty shares this year. They previously made an even bigger sale of -US$3.1m worth of shares at a price of US$61.35 per share. That means that an insider was selling shares at slightly below the current price (US$70.80). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 3.2%of Dominic Frederico's holding.
Insiders in Assured Guaranty didn't buy any shares in 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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Does Assured Guaranty 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. 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's great to see that Assured Guaranty insiders own 5.2% of the company, worth about US$213m. 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 Assured Guaranty Insiders?
An insider hasn't bought Assured Guaranty stock in the last three months, but there was some selling. Looking to the last twelve months, our data doesn't show any insider buying. But since Assured Guaranty is profitable and growing, we're not too worried by this. It is good to see high insider ownership, but the insider selling leaves us cautious. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Our analysis shows 3 warning signs for Assured Guaranty (1 is potentially serious!) and we strongly recommend you look at them before investing.
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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.