Did AbbVie Inc. (NYSE:ABBV) Insiders Buy Up More Shares?
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 shareholders might well want to know whether insiders have been buying or selling shares in AbbVie Inc. (NYSE:ABBV).
Do Insider Transactions Matter?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise'.
Check out our latest analysis for AbbVie
AbbVie Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Brian Durkin for US$311k worth of shares, at about US$69.00 per share. We do like to see buying, but this purchase was made at well below the current price of US$101. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
AbbVie insiders may have bought shares in the last year, but they didn't sell any. The average buy price was around US$75.90. We don't deny that it is nice to see insiders buying stock in the company. But we must note that the investments were made at well below today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
AbbVie is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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. AbbVie insiders own about US$157m worth of shares (which is 0.09% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At AbbVie Tell Us?
It doesn't really mean much that no insider has traded AbbVie shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. Judging from their transactions, and high insider ownership, AbbVie insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. At Simply Wall St, we've found that AbbVie has 4 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.
But note: AbbVie 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, 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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