We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we’ll take a look at whether insiders have been buying or selling shares in Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT).
Do Insider Transactions Matter?
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.
We don’t think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. As Peter Lynch said, ‘insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.’
The Last 12 Months Of Insider Transactions At Rocket Pharmaceuticals
In the last twelve months, the biggest single sale by an insider was when Director David Southwell sold US$589k worth of shares at a price of US$15.19 per share. That means that even when the share price was slightly below the current price of US$15.49, an insider wanted to cash in some shares. While their view may have changed since they sold, this isn’t a particularly bullish sign. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. Please note, however, that this single sale was just 28.9% of David Southwell’s stake. The only individual insider seller over the last year was David Southwell.
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!
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insider Ownership of Rocket Pharmaceuticals
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. Rocket Pharmaceuticals insiders own about US$15m worth of shares. That equates to 2.2% 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 Rocket Pharmaceuticals Insiders?
An insider sold stock recently, but they haven’t been buying. Zooming out, the longer term picture doesn’t give us much comfort. Insiders own shares, but we’re still pretty cautious, given the history of sales. We’d think twice before buying! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Rocket Pharmaceuticals.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.