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Quite a few insiders have dramatically grown their holdings in Ashland Inc. (NYSE:ASH) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
View our latest analysis for Ashland
Ashland Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chairman & CEO Guillermo Novo bought US$2.0m worth of shares at a price of US$64.24 per share. So it's clear an insider wanted to buy, at around the current price, which is US$66.03. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. The good news for Ashland share holders is that insiders were buying at near the current price.
In the last twelve months Ashland insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Ashland Insiders Bought Stock Recently
Over the last quarter, Ashland insiders have spent a meaningful amount on shares. Overall, two insiders shelled out US$2.2m for shares in the company -- and none sold. This is a positive in our book as it implies some confidence.
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. A high insider ownership often makes company leadership more mindful of shareholder interests. Ashland insiders own about US$36m worth of shares. That equates to 1.1% of the company. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Ashland Tell Us?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. When combined with notable insider ownership, these factors suggest Ashland 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. For example, Ashland has 4 warning signs (and 2 which are concerning) we think you should know about.