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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 before you buy or sell Aurinia Pharmaceuticals Inc. (TSE:AUP), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
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, 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 it is perfectly logical to keep tabs on what insiders are doing. 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 Aurinia Pharmaceuticals
The , Robert Duggan, made the biggest insider sale in the last 12 months. That single transaction was for CA$4.9m worth of shares at a price of CA$10.21 each. We generally don't like to see insider selling, but the lower the sale price, the more it concerns us. The good news is that this large sale was at well above current price of CA$8.36. So it may not shed much light on insider confidence at current levels.
Happily, we note that in the last year insiders paid CA$78k for 9700 shares. But they sold 884k for CA$7.7m. All up, insiders sold more shares in Aurinia Pharmaceuticals than they bought, over the last year. You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Insiders at Aurinia Pharmaceuticals Have Sold Stock Recently
The last three months saw significant insider selling at Aurinia Pharmaceuticals. Specifically, Chief Medical Officer Neil Solomons ditched US$470k worth of shares in that time, and we didn't record any purchases whatsoever. In light of this it's hard to argue that all the insiders think that the shares are a bargain.
Does Aurinia Pharmaceuticals Boast High Insider Ownership?
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. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Aurinia Pharmaceuticals insiders own 6.7% of the company, worth about CA$51m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.
So What Does This Data Suggest About Aurinia Pharmaceuticals Insiders?
An insider sold stock recently, but they haven't been buying. Despite some insider buying, the longer term picture doesn't make us feel much more positive. While insiders do own shares, they don't own a heap, and they have been selling. We'd think twice before buying! Of course, the future is what matters most. So if you are interested in Aurinia Pharmaceuticals, you should check out this free report on analyst forecasts for the company.
Of course Aurinia Pharmaceuticals may not be the best stock to buy. So you may wish to see this free collection of high quality 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.