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Insiders who purchased The AES Corporation (NYSE:AES) shares in the past 12 months are unlikely to be deeply impacted by the stock's 5.3% decline over the past week. Reason being, despite the recent loss, insiders original purchase value of US$1.7m is now worth US$1.9m.
While insider transactions are not the most important thing when it comes to long-term investing, we would consider it foolish to ignore insider transactions altogether.
See our latest analysis for AES
The Last 12 Months Of Insider Transactions At AES
The Executive VP & CFO Stephen Coughlin made the biggest insider purchase in the last 12 months. That single transaction was for US$1.0m worth of shares at a price of US$21.30 each. Even though the purchase was made at a significantly lower price than the recent price (US$24.83), we still think insider buying is a positive. While it does suggest insiders consider the stock undervalued at lower prices, this transaction doesn't tell us much about what they think of current prices.
AES insiders may have bought shares in the last year, but they didn't sell any. 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
AES Insiders Bought Stock Recently
Over the last quarter, AES insiders have spent a meaningful amount on shares. Specifically, Executive VP & CFO Stephen Coughlin bought US$1.0m worth of shares in that time, and we didn't record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
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. I reckon it's a good sign if insiders own a significant number of shares in the company. AES insiders own about US$52m worth of shares. That equates to 0.3% of the company. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At AES Tell Us?
The recent insider purchase is heartening. And the longer term insider transactions also give us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. When combined with notable insider ownership, these factors suggest AES insiders are well aligned, and that they may think the share price is too low. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Every company has risks, and we've spotted 2 warning signs for AES you should know about.