Don't Ignore The Insider Selling In Aristocrat Leisure

We wouldn't blame Aristocrat Leisure Limited (ASX:ALL) shareholders if they were a little worried about the fact that Trevor Croker, the CEO, MD & Director recently netted about AU$7.5m selling shares at an average price of AU$61.27. That sale reduced their total holding by 17% which is hardly insignificant, but far from the worst we've seen.

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Aristocrat Leisure Insider Transactions Over The Last Year

In fact, the recent sale by Trevor Croker was the biggest sale of Aristocrat Leisure shares made by an insider individual in the last twelve months, according to our records. That means that an insider was selling shares at below the current price (AU$61.57). We generally consider it a negative if insiders have been selling, especially if they did so below the current price, because it implies that they considered a lower price to be reasonable. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. We note that the biggest single sale was only 17% of Trevor Croker's holding.

Happily, we note that in the last year insiders paid AU$260k for 4.78k shares. But they sold 121.69k shares for AU$7.5m. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for Aristocrat Leisure

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Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 0.1% of Aristocrat Leisure shares, worth about AU$54m. 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 Aristocrat Leisure Tell Us?

An insider sold Aristocrat Leisure shares recently, but they didn't buy any. And our longer term analysis of insider transactions didn't bring confidence, either. But since Aristocrat Leisure is profitable and growing, we're not too worried by this. While insiders do own shares, they don't own a heap, and they have been selling. So we'd only buy after careful consideration. In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Aristocrat Leisure. Case in point: We've spotted 1 warning sign for Aristocrat Leisure you should be aware of.

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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.