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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Immunomedics, Inc. (NASDAQ:IMMU).
Do Insider Transactions Matter?
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.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year.'
The Last 12 Months Of Insider Transactions At Immunomedics
Bryan Ball made the biggest insider purchase in the last 12 months. That single transaction was for US$67k worth of shares at a price of US$13.35 each. That implies that an insider found the current price of US$14.19 per share to be enticing. Of course they may have changed their mind. But this suggests they are optimistic. 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. The good news for Immunomedics share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Bryan Ball.
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!
Immunomedics is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Does Immunomedics 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. Our data isn't picking up on much insider ownership at Immunomedics, though insiders do hold about US$287k worth of shares. However, it's possible that insiders might have an indirect interest through a more complex structure. This level of insider ownership is notably low, and not very encouraging.
What Might The Insider Transactions At Immunomedics Tell Us?
It's certainly positive to see the recent insider purchase. We also take confidence from the longer term picture of insider transactions. But on the other hand, the company made a loss last year, which makes us a little cautious. We would certainly prefer see higher levels of insider ownership but analysis of the insider transactions suggests that Immunomedics insiders are expecting a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Immunomedics.
But note: Immunomedics 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.
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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.