Some Align Technology, Inc. (NASDAQ:ALGN) shareholders may be a little concerned to see that the Independent Director, Joseph Lacob, recently sold a substantial US$7.7m worth of stock at a price of US$307 per share. That sale reduced their total holding by 16% which is hardly insignificant, but far from the worst we've seen.
Align Technology Insider Transactions Over The Last Year
Notably, that recent sale by Joseph Lacob is the biggest insider sale of Align Technology shares that we've seen in the last year. That means that an insider was selling shares at around the current price of US$300. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern.
In the last twelve months insiders purchased 17.51k shares for US$4.0m. On the other hand they divested 27.52k shares, for US$8.4m. Over the last year we saw more insider selling of Align Technology shares, than buying. The average sell price was around US$305. We don't gain confidence from insider selling below the recent share price. But we wouldn't put too much weight on the insider selling. 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!
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Align Technology insiders own about US$940m worth of shares (which is 4.2% of the company). 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 Align Technology Insiders?
Insiders sold Align Technology shares recently, but they didn't buy any. Despite some insider buying, the longer term picture doesn't make us feel much more positive. On the plus side, Align Technology makes money, and is growing profits. 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. 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. While conducting our analysis, we found that Align Technology has 1 warning sign and it would be unwise to ignore it.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting 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.