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We often see insiders buying up shares in companies that perform well over the long term. 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 AxoGen, Inc. (NASDAQ:AXGN).
What Is Insider Selling?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock on the market. 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 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.'
AxoGen Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider sale was by the Chairman, Karen Zaderej, for US$830k worth of shares, at about US$33.42 per share. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. The good news is that this large sale was at well above current price of US$20.99. So it may not shed much light on insider confidence at current levels.
All up, insiders sold more shares in AxoGen than they bought, over the last year. The sellers received a price of around US$29.65, on average. Insider selling doesn't make us excited to buy. However, we do note that the average sale price was significantly higher than the current share price (which is US$20.99). The chart below shows insider transactions (by individuals) over the last year. 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 that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
AxoGen Insiders Are Selling The Stock
We've seen more insider selling than insider buying at AxoGen recently. In total, David Hansen sold US$453k worth of shares in that time. On the flip side, Amy McBride-Wendell spent US$101k on purchasing shares. Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.
Insider Ownership of AxoGen
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. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that AxoGen insiders own 3.1% of the company, worth about US$26m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
What Might The Insider Transactions At AxoGen Tell Us?
The stark truth for AxoGen is that there has been more insider selling than insider buying in the last three months. And our longer term analysis of insider transactions didn't bring confidence, either. Insiders own shares, but we're still pretty cautious, given the history of sales. So we'd only buy after careful consideration. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for AxoGen.
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 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 firstname.lastname@example.org. 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.