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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 Hemispherx Biopharma, Inc. (NYSEMKT:HEB).
What Is Insider Buying?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. 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 Hemispherx Biopharma
In the last twelve months, the biggest single purchase by an insider was when Executive Vice Chairman Thomas Equels bought US$118k worth of shares at a price of US$4.03 per share. That implies that an insider found the current price of US$4.16 per share to be enticing. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for Hemispherx Biopharma share holders is that insiders were buying at near the current price.
Over the last year, we can see that insiders have bought 40768.63 shares worth US$255k. In the last twelve months Hemispherx Biopharma insiders were buying shares, but not selling. Their average price was about US$6.26. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are always plenty of stocks that insiders are buying. So if that suits your style you could check each stock one by one or you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insiders at Hemispherx Biopharma Have Bought Stock Recently
It's good to see that Hemispherx Biopharma insiders have made notable investments in the company's shares. Thomas Equels spent US$118k on stock, and there wasn't any selling. This is a positive in our book as it implies some confidence.
Insider Ownership of Hemispherx Biopharma
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. From looking at our data, insiders own US$303k worth of Hemispherx Biopharma stock, about 3.6% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. We consider this fairly low insider ownership.
So What Do The Hemispherx Biopharma Insider Transactions Indicate?
The recent insider purchase is heartening. 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. On this analysis the only slight negative we see is the fairly low (overall) insider ownership; their transactions suggest that they are quite positive on Hemispherx Biopharma stock. Of course, the future is what matters most. So if you are interested in Hemispherx Biopharma, you should check out this free report on analyst forecasts for the company.
Of course Hemispherx Biopharma may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body.
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.