The fact that multiple American Eagle Outfitters, Inc. (NYSE:AEO) insiders offloaded a considerable amount of shares over the past year could have raised some eyebrows amongst investors. Knowing whether insiders are buying is usually more helpful when evaluating insider transactions, as insider selling can have various explanations. However, when multiple insiders sell stock over a specific duration, shareholders should take notice as that could possibly be a red flag.

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.

American Eagle Outfitters Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when the Executive Chairman of the Board & CEO, Jay Schottenstein, sold US$20m worth of shares at a price of US$20.04 per share. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of US$17.24. So it is hard to draw any strong conclusion from it.

American Eagle Outfitters 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!

For those who like to find hidden gems this free list of small cap companies with recent insider purchasing, could be just the ticket.

American Eagle Outfitters Insiders Are Selling The Stock

We have seen a bit of insider selling at American Eagle Outfitters, over the last three months. Independent Director Cary McMillan sold just US$48k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the amount sold isn't enough for us to put any weight on it.

Does American Eagle Outfitters Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that American Eagle Outfitters insiders own 6.8% of the company, worth about US$210m. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.

So What Do The American Eagle Outfitters Insider Transactions Indicate?

Our data shows a little more insider selling, but no insider buying, in the last three months. But given the selling was modest, we're not worried. It's heartening that insiders own plenty of stock, but we'd like to see more insider buying, since the last year of American Eagle Outfitters insider transactions don't fill us with confidence. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. In terms of investment risks, we've identified 2 warning signs with American Eagle Outfitters and understanding them should be part of your investment process.

But note: American Eagle Outfitters may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE 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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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.