More Money In The Bank For American Well Insiders Who Divested US$954k

While American Well Corporation (NYSE:AMWL) shareholders have had a good week with the stock up 15%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$954k worth of stock in the past 12 months. This could be a sign of impending weakness.

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.

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American Well Insider Transactions Over The Last Year

The Executive VP, Mark Hirschhorn, made the biggest insider sale in the last 12 months. That single transaction was for US$127k worth of shares at a price of US$11.80 each. So it's clear an insider wanted to take some cash off the table, even below the current price of US$13.97. When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. 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 19% of Mark Hirschhorn's holding.

All up, insiders sold more shares in American Well than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!

Check out our latest analysis for American Well

If you like to buy stocks that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: Most of them are flying under the radar).

American Well Insiders Are Selling The Stock

The last three months saw significant insider selling at American Well. In total, insiders dumped US$431k worth of shares in that time, and we didn't record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.

Does American Well Boast High 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 16% of American Well shares, worth about US$35m. 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 American Well Insider Transactions Indicate?

Insiders sold stock recently, but they haven't been buying. And our longer term analysis of insider transactions didn't bring confidence, either. While insiders do own shares, they don't own a heap, and they have been selling. We're in no rush to buy! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing American Well. You'd be interested to know, that we found 3 warning signs for American Well and we suggest you have a look.

Of course American Well 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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