It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Veru Inc. (NASDAQ:VERU).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. 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 logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’
Veru Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Gary Barnette for US$146k worth of shares, at about US$1.51 per share. So it’s clear an insider wanted to buy, even at a higher price. 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. It’s not at all bad to see insiders buy shares at or above current prices.
Happily, we note that in the last year insiders bought 416.28k shares for a total of US$675k. In total, Veru insiders bought more than they sold over the last year. The average buy price was around US$1.62. These transactions suggest that insiders have considered the current price of US$1.48 attractive. 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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Veru Insiders Bought Stock Recently
Over the last quarter, Veru insiders have spent a meaningful amount on shares. Not only was there no selling that we can see, but they collectively bought US$244k worth of shares. This could be interpreted as suggesting a positive outlook.
Insider Ownership of Veru
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. We usually like to see fairly high levels of insider ownership. Veru insiders own about US$30m worth of shares. That equates to 32% 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 Veru Insiders?
The recent insider purchases are heartening. We also take confidence from the longer term picture of insider transactions. But we don’t feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Veru we think they are probably pretty confident of a bright future. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Veru.
Of course Veru may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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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.