We wouldn't blame Applied Digital Corporation (NASDAQ:APLD) shareholders if they were a little worried about the fact that Charles Hastings, the Independent Director recently netted about US$1.3m selling shares at an average price of US$13.33. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.
Applied Digital Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the Chairman, Wesley Cummins, sold US$1.8m worth of shares at a price of US$9.20 per share. So it's clear an insider wanted to take some cash off the table, even below the current price of US$14.24. We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. 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. It is worth noting that this sale was only 4.9% of Wesley Cummins's holding.
Applied Digital insiders didn't buy any shares over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
View our latest analysis for Applied Digital
If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).
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. We usually like to see fairly high levels of insider ownership. Applied Digital insiders own about US$334m worth of shares (which is 8.6% of the company). 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 Applied Digital Insider Transactions Indicate?
Insiders sold stock recently, but they haven't been buying. And there weren't any purchases to give us comfort, over the last year. 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. At Simply Wall St, we've found that Applied Digital has 3 warning signs (2 are potentially serious!) that deserve your attention before going any further with your analysis.
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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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.