We'd be surprised if Alamo Group Inc. (NYSE:ALG) shareholders haven't noticed that the Executive VP & Head of Corporate Development, Edward Rizzuti, recently sold US$446k worth of stock at US$164 per share. The eyebrow raising move amounted to a reduction of 25% in their holding.

The Last 12 Months Of Insider Transactions At Alamo Group

Notably, that recent sale by Executive VP & Head of Corporate Development Edward Rizzuti was not the only time they sold Alamo Group shares this year. Earlier in the year, they fetched US$213 per share in a -US$621k sale. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The silver lining is that this sell-down took place above the latest price (US$165). So it may not tell us anything about how insiders feel about the current share price.

Happily, we note that in the last year insiders paid US$291k for 1.75k shares. On the other hand they divested 9.24k shares, for US$1.8m. All up, insiders sold more shares in Alamo Group than they bought, over the last year. 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!

I will like Alamo Group better if I see some big insider buys.

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. Alamo Group insiders own about US$31m worth of shares. That equates to 1.5% 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.

So What Do The Alamo Group Insider Transactions Indicate?

An insider sold stock recently, but they haven't been buying. Zooming out, the longer term picture doesn't give us much comfort. While insiders do own shares, they don't own a heap, and they have been selling. We'd practice some caution before buying! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. While conducting our analysis, we found that Alamo Group has 1 warning sign and it would be unwise to ignore this.

But note: Alamo Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

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.

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.