We often see insiders buying up shares in companies that perform well over the long term. 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 Chimerix, Inc. (NASDAQ:CMRX).
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, most countries require that the company discloses such transactions to the market.
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. 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'.
Chimerix Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Chief Business Officer Michael Andriole bought US$156k worth of shares at a price of US$1.56 per share. Even though the purchase was made at a significantly lower price than the recent price (US$2.74), we still think insider buying is a positive. Because the shares were purchased at a lower price, this particular buy doesn't tell us much about how insiders feel about the current share price.
In the last twelve months insiders purchased 319.80k shares for US$493k. On the other hand they divested 48.60k shares, for US$100k. In the last twelve months there was more buying than selling by Chimerix insiders. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Chimerix is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Have Chimerix Insiders Traded Recently?
We saw insider selling worth US$11k in the last three months. That's only a tiny bit more than the purchases, worth US$10k. The net selling is so small that it's hard to draw any conclusions from these recent transactions.
Insider Ownership of Chimerix
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Our data suggests Chimerix insiders own 2.3% of the company, worth about US$3.9m. But they may have an indirect interest through a corporate structure that we haven't picked up on. I generally like to see higher levels of ownership.
So What Do The Chimerix Insider Transactions Indicate?
Our data shows a little more insider selling than buying in the last three months. But the difference is small, and thus, not concerning. But insiders have shown more of an appetite for the stock, over the last year. We'd like to see bigger individual holdings. However, we don't see anything to make us think Chimerix insiders are doubting the company. 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. While conducting our analysis, we found that Chimerix has 2 warning signs and it would be unwise to ignore these.
But note: Chimerix 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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