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 Arvinas Holding Company, LLC (NASDAQ:ARVN).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. 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 Arvinas Holding Company
Director Bradley Margus made the biggest insider purchase in the last 12 months. That single transaction was for US$640k worth of shares at a price of US$16.00 each. That implies that an insider found the current (approximate) price enticing. That means they have been optimistic about the company in the past, though they may have changed their mind. Nonetheless, we consider it positive if insiders want to buy at around the current share price.
Over the last year, we can see that insiders have bought 96.60k shares worth US$1.5m. In total, Arvinas Holding Company insiders bought more than they sold over the last year. The average buy price was around US$16.00. These transactions show that insiders have confidence to invest their own money in the stock, albeit at slightly below the recent price of US$17.50. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Arvinas Holding Company better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Does Arvinas Holding Company Boast High Insider Ownership?
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. 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 12% of Arvinas Holding Company shares, worth about US$69m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Arvinas Holding Company Insider Transactions Indicate?
It doesn’t really mean much that no insider has traded Arvinas Holding Company shares in the last quarter. However, our analysis of transactions over the last year is heartening. Overall we don’t see anything to make us think Arvinas Holding Company insiders are doubting the company, and they do own shares. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.