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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. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Eiger BioPharmaceuticals, Inc. (NASDAQ:EIGR), you may well want to know whether insiders have been buying or selling.
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
The Last 12 Months Of Insider Transactions At Eiger BioPharmaceuticals
Director Eldon Mayer made the biggest insider purchase in the last 12 months. That single transaction was for US$208k worth of shares at a price of US$10.07 each. That means that even when the share price was higher, an insider wanted to purchase shares. Their view may have changed since then, but at least it shows they felt optimistic at the time. That purchase may suggest an expectation of positive returns over the long term.
Over the last year, we can see that insiders have bought 30.00k shares worth US$305k. In total, Eiger BioPharmaceuticals insiders bought more than they sold over the last year. The average buy price was around US$10.17. This is nice to see since it implies that insiders might see value around current prices (around US$9.97). You can see a visual depiction of insider transactions 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Eiger BioPharmaceuticals Have Bought Stock Recently
It’s good to see that Eiger BioPharmaceuticals insiders have made notable investments in the company’s shares. Not only was there no selling that we can see, but they collectively bought US$305k worth of shares. This could be interpreted as suggesting a positive outlook.
Does Eiger BioPharmaceuticals Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It’s great to see that Eiger BioPharmaceuticals insiders own 1.7% of the company, worth about US$3.3m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Do The Eiger BioPharmaceuticals Insider Transactions Indicate?
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. While the overall levels of insider ownership are below what we’d like to see, the history of transactions imply that Eiger BioPharmaceuticals insiders are reasonably well aligned, and optimistic for the future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Eiger BioPharmaceuticals.
But note: Eiger BioPharmaceuticals 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.