Those following along with Align Technology, Inc. (NASDAQ:ALGN) will no doubt be intrigued by the recent purchase of shares by Joseph Hogan, President of the company, who spent a stonking US$2.0m on stock at an average price of US$189. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 6.0%.
Align Technology Insider Transactions Over The Last Year
The Independent Director, Warren Thaler, made the biggest insider sale in the last 12 months. That single transaction was for US$3.5m worth of shares at a price of US$703 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$181). So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Warren Thaler.
In the last twelve months insiders purchased 20.85k shares for US$4.7m. But insiders sold 5.00k shares worth US$3.5m. In total, Align Technology insiders bought more than they sold over the last year. The average buy price was around US$228. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Align Technology is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insider Ownership Of Align Technology
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. Align Technology insiders own 4.0% of the company, currently worth about US$567m based on the recent share price. 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 Do The Align Technology Insider Transactions Indicate?
The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. Once you factor in the high insider ownership, it certainly seems like insiders are positive about Align Technology. That's what I like to see! 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. To assist with this, we've discovered 1 warning sign that you should run your eye over to get a better picture of Align Technology.
Of course Align Technology 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, but not derivative transactions.
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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.
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