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 before you buy or sell AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. 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 it is perfectly logical to keep tabs on what insiders are doing. 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'.
AMAG Pharmaceuticals Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when CEO, President & Director William Heiden bought US$107k worth of shares at a price of US$10.70 per share. That means that an insider was happy to buy shares at around the current price of US$11.99. That means they have been optimistic about the company in the past, though they may have changed their mind. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. In this case we're pleased to report that the insider purchases were made at close to current prices.
Happily, we note that in the last year insiders bought 25000 shares for a total of US$261k. AMAG Pharmaceuticals insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
AMAG Pharmaceuticals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at AMAG Pharmaceuticals Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at AMAG Pharmaceuticals. Executive VP of Development & Chief Medical Officer Julie Krop spent US$99k on stock, and there wasn't any selling. This could be interpreted as suggesting a positive outlook.
Insider Ownership of AMAG Pharmaceuticals
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. From our data, it seems that AMAG Pharmaceuticals insiders own 1.4% of the company, worth about US$5.9m. We do generally prefer see higher levels of insider ownership.
So What Does This Data Suggest About AMAG Pharmaceuticals Insiders?
It's certainly positive to see the recent insider purchase. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that AMAG Pharmaceuticals insiders are expecting a bright future. 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.
But note: AMAG Pharmaceuticals 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.