We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So we'll take a look at whether insiders have been buying or selling shares in Adverum Biotechnologies, Inc. (NASDAQ:ADVM).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
The Last 12 Months Of Insider Transactions At Adverum Biotechnologies
In the last twelve months, the biggest single sale by an insider was when the President, Leone Patterson, sold US$325k worth of shares at a price of US$24.68 per share. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The good news is that this large sale was at well above current price of US$13.01. So it is hard to draw any strong conclusion from it. The only individual insider seller over the last year was Leone Patterson.
Happily, we note that in the last year insiders paid US$337k for 25.38k shares. But they sold 13.17k shares for US$325k. In the last twelve months there was more buying than selling by Adverum Biotechnologies insiders. 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!
Adverum Biotechnologies is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Adverum Biotechnologies Insiders Are Selling The Stock
We've seen more insider selling than insider buying at Adverum Biotechnologies recently. We note President Leone Patterson cashed in US$325k worth of shares. On the other hand we note insiders bought US$200k worth of shares. The share price has moved a bit recently, but it's hard to argue that the selling is a positive.
Insider Ownership of Adverum Biotechnologies
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 0.6% of Adverum Biotechnologies shares, worth about US$7.9m, according to our data. Whilst better than nothing, we're not overly impressed by these holdings.
What Might The Insider Transactions At Adverum Biotechnologies Tell Us?
The stark truth for Adverum Biotechnologies is that there has been more insider selling than insider buying in the last three months. In contrast, they appear keener if you look at the last twelve months. But insiders own relatively little of the company, from what we can see. So the company doesn't look great on this analysis. While we like knowing 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. Case in point: We've spotted 5 warning signs for Adverum Biotechnologies you should be aware of, and 2 of them are a bit unpleasant.
Of course Adverum Biotechnologies 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, but not derivative transactions.
This article by Simply Wall St is general in nature. 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.
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