InnovaDerma PLC (LON:IDP) Insiders Have Been Selling
It is not uncommon to see companies perform well in the years after insiders buy shares. 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 InnovaDerma PLC (LON:IDP).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. However, rules govern insider transactions, and certain disclosures are required.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
Check out our latest analysis for InnovaDerma
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
The Last 12 Months Of Insider Transactions At InnovaDerma
Founder & Executive Chairman Haris Chaudhry made the biggest insider sale in the last 12 months. That single transaction was for UK£1.4m worth of shares at a price of UK£1.50 each. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of UK£0.72. So it may not shed much light on insider confidence at current levels. The only individual insider seller over the last year was Haris Chaudhry.
Haris Chaudhry divested 1.48m shares over the last 12 months at an average price of UK£1.40. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Have InnovaDerma Insiders Traded Recently?
We’ve only seen a tiny insider purchase valued at UK£2.6k, in the last three months. Overall, we don’t think these recent trades are particularly informative, one way or the other.
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. It appears that InnovaDerma insiders own 29% of the company, worth about UK£3.7m. 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 InnovaDerma Insider Transactions Indicate?
Our data shows a little more insider buying than selling in the last three months. But the net investment is not enough to encourage us much. We don’t take much encouragement from the transactions by InnovaDerma insiders. The modest level of insider ownership is, at least, some comfort. 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 InnovaDerma may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
