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 before you buy or sell Anaplan, Inc. (NYSE:PLAN), you may well want to know whether insiders have been buying or selling.
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.
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.’
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The Last 12 Months Of Insider Transactions At Anaplan
Over the last year, we can see that the biggest insider purchase was by Director Sandesh Patnam for US$500k worth of shares, at about US$17.00 per share. Although we like to see insider buying, we note that this large purchase was at significantly lower prices. The insider buying may not tell us much about how insiders feel about the current share price.
In the last twelve months insiders paid US$803k for 43.01k shares purchased. In the last twelve months there was more buying than selling by Anaplan insiders. The average buy price was around US$18.68. We don’t deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today’s share price. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Anaplan is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Anaplan Insiders Bought Stock Recently
Over the last quarter, Anaplan insiders have spent a meaningful amount on shares. In total, insiders bought US$803k worth of shares in that time, and we didn’t record any sales whatsoever. This could be interpreted as suggesting a positive outlook.
For a common shareholder, it is worth checking how many shares are held by company 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. Anaplan insiders own about US$72m worth of shares. That equates to 2.4% of the company. We’ve certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Anaplan Tell Us?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Given that insiders also own a fair bit of Anaplan we think they are probably pretty confident of a bright future. Of course, the future is what matters most. So if you are interested in Anaplan, you should check out this free report on analyst forecasts for the company.
But note: Anaplan 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.
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 email@example.com.