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Have Insiders Been Buying Varex Imaging Corporation (NASDAQ:VREX) Shares This Year?

Andrew Edmonds

We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Varex Imaging Corporation (NASDAQ:VREX).

What Is Insider Buying?

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 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.’

See our latest analysis for Varex Imaging

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The Last 12 Months Of Insider Transactions At Varex Imaging

Over the last year, we can see that the biggest insider purchase was by Director Walter Rosebrough for US$284k worth of shares, at about US$28.39 per share. That means that even when the share price was higher, an insider wanted to purchase shares. 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 generally consider it a positive if insiders have been buying on market, even above the current price.

Over the last year, we can see that insiders have bought 20.30k shares worth US$579k. But insiders sold 1.50k shares worth US$57k. Overall, Varex Imaging insiders were net buyers last year. The average buy price was around US$28.51. These transactions suggest that insiders have considered the current price of US$25.80 attractive. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

NasdaqGS:VREX Insider Trading January 11th 19
NasdaqGS:VREX Insider Trading January 11th 19

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Varex Imaging Boast High Insider Ownership?

Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Our data suggests Varex Imaging insiders own 0.4% of the company, worth about US$3.8m. I generally like to see higher levels of ownership.

What Might The Insider Transactions At Varex Imaging Tell Us?

It doesn’t really mean much that no insider has traded Varex Imaging shares in the last quarter. But insiders have shown more of an appetite for the stock, over the last year. We’d like to see bigger individual holdings. However, we don’t see anything to make us think Varex Imaging insiders are doubting the company. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity 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 editorial-team@simplywallst.com.