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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 we’ll take a look at whether insiders have been buying or selling shares in Axsome Therapeutics, Inc. (NASDAQ:AXSM).
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.
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’.
The Last 12 Months Of Insider Transactions At Axsome Therapeutics
In the last twelve months, the biggest single purchase by an insider was when CFO & Principal Accounting Officer Nick Pizzie bought US$96k worth of shares at a price of US$3.10 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.
Happily, we note that in the last year insiders bought 41.50k shares for a total of US$226k. Overall, Axsome Therapeutics insiders were net buyers last year. Their average price was about US$5.45. It is certainly positive to see that insiders have invested their own money in the company. However, we do note that they were buying at significantly lower prices than today’s share price. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Axsome Therapeutics Insiders Bought Stock Recently
Over the last three months, we’ve seen significant insider buying at Axsome Therapeutics. Overall, 2 insiders shelled out US$130k for shares in the company — and none sold. This makes one think the business has some good points.
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. Axsome Therapeutics insiders own about US$22m worth of shares. That equates to 5.2% of the company. 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 Does This Data Suggest About Axsome Therapeutics Insiders?
It is good to see recent purchasing. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. When combined with notable insider ownership, these factors suggest Axsome Therapeutics insiders are well aligned, and that they may think the share price is too low. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Axsome Therapeutics.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.