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The recent price decline of 10% in Adverum Biotechnologies, Inc.'s (NASDAQ:ADVM) stock may have disappointed insiders who bought US$613k worth of shares at an average price of US$10.46 in the past 12 months. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth US$130k, which is not what they expected.
Although we don't think shareholders should simply follow insider transactions, we do think it is perfectly logical to keep tabs on what insiders are doing.
Adverum Biotechnologies Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Independent Director Dawn Svoronos bought US$200k worth of shares at a price of US$10.02 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$2.21). Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
Happily, we note that in the last year insiders paid US$613k for 58.60k shares. On the other hand they divested 12.53k shares, for US$177k. In the last twelve months there was more buying than selling by Adverum Biotechnologies insiders. The chart below shows insider transactions (by companies and individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Based on our data, Adverum Biotechnologies insiders have about 1.9% of the stock, worth approximately US$4.1m. I generally like to see higher levels of ownership.
What Might The Insider Transactions At Adverum Biotechnologies Tell Us?
The fact that there have been no Adverum Biotechnologies insider transactions recently certainly doesn't bother us. However, our analysis of transactions over the last year is heartening. We'd like to see bigger individual holdings. However, we don't see anything to make us think Adverum Biotechnologies insiders are doubting the company. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. To that end, you should learn about the 4 warning signs we've spotted with Adverum Biotechnologies (including 1 which shouldn't be ignored).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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