Allegion plc (NYSE:ALLE) shareholders (or potential shareholders) will be happy to see that the President, John Stone, recently bought a whopping US$675k worth of stock, at a price of US$135. Not only is that a big swing, but it increased their holding size by 12%, which is definitely great to see.
Allegion Insider Transactions Over The Last Year
In fact, the recent purchase by President John Stone was not their only acquisition of Allegion shares this year. Earlier in the year, they paid US$132 per share in a US$1.3m purchase. That means that an insider was happy to buy shares at above the current price of US$132. It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. As a general rule, we feel more positive about a stock if insiders have bought shares at above current prices, because that suggests they viewed the stock as good value, even at a higher price.
In the last twelve months insiders purchased 16.00k shares for US$2.1m. But they sold 22.75k shares for US$2.8m. All up, insiders sold more shares in Allegion than they bought, 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!
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Does Allegion Boast High 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. 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 appears that Allegion insiders own 0.2% of the company, worth about US$29m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Do The Allegion Insider Transactions Indicate?
The recent insider purchases are heartening. But we can't say the same for the transactions over the last 12 months. We don't take much heart from transactions by Allegion insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. 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 Allegion has 1 warning sign and it would be unwise to ignore this.
Of course Allegion 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 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com