Insiders See US$808.5k Investment In Ampco-Pittsburgh Jump Last Week

Ampco-Pittsburgh Corporation (NYSE:AP) insiders who purchased shares in the last 12 months were richly rewarded last week. The stock climbed by 26% resulting in a US$21m addition to the company’s market value. In other words, the original US$808.5k purchase is now worth US$1.52m.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we would consider it foolish to ignore insider transactions altogether.

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The Last 12 Months Of Insider Transactions At Ampco-Pittsburgh

In the last twelve months, the biggest single purchase by an insider was when insider Bruce Galloway bought US$611k worth of shares at a price of US$3.55 per share. Although we like to see insider buying, we note that this large purchase was at significantly below the recent price of US$5.04. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.

While Ampco-Pittsburgh insiders bought shares during the last year, they didn't sell. The average buy price was around US$2.69. We don't deny that it is nice to see insiders buying stock in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels. 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!

Check out our latest analysis for Ampco-Pittsburgh

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).

Ampco-Pittsburgh Insiders Bought Stock Recently

It's good to see that Ampco-Pittsburgh insiders have made notable investments in the company's shares. Not only was there no selling that we can see, but they collectively bought US$800k worth of shares. This could be interpreted as suggesting a positive outlook.

Insider Ownership

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Insiders own 14% of Ampco-Pittsburgh shares, worth about US$13m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.

So What Does This Data Suggest About Ampco-Pittsburgh Insiders?

The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don't feel the same about the fact the company is making losses. When combined with notable insider ownership, these factors suggest Ampco-Pittsburgh insiders are well aligned, and that they may think the share price is too low. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Ampco-Pittsburgh. When we did our research, we found 4 warning signs for Ampco-Pittsburgh (2 shouldn't be ignored!) that we believe deserve your full attention.

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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.