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It is not uncommon to see companies perform well in the years after insiders buy shares. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So we'll take a look at whether insiders have been buying or selling shares in Halozyme Therapeutics, Inc. (NASDAQ:HALO).
What Is Insider Buying?
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.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. 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.'
The Last 12 Months Of Insider Transactions At Halozyme Therapeutics
In the last twelve months, the biggest single sale by an insider was when Randal Kirk sold US$8.6m worth of shares at a price of US$18.48 per share. So we know that an insider sold shares at around the present share price of US$16.17. They might be selling for a variety of reasons, but it's hard to argue this is a bullish sign. We usually pause to reflect on the potential that a stock has a high valuation, if insiders have been selling at around the current price.
Over the last year, we note insiders sold 1.43m shares worth US$25m. In total, Halozyme Therapeutics insiders sold more than they bought over the last year. The sellers received a price of around US$17.54, on average. It's not particularly great to see insiders were selling shares around current prices. But we don't put too much weight on the insider selling, since sellers could have personal reasons. 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!
I will like Halozyme Therapeutics better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Halozyme Therapeutics Have Sold Stock Recently
We have seen a bit of insider selling at Halozyme Therapeutics, over the last three months. Chief Medical Officer & Senior VP Dimitrios Chondros divested only US$42k worth of shares in that time. It's not great to see insider selling, nor the lack of recent buyers. But the selling simply isn't sufficiently substantial to be of much use as a signal.
Does Halozyme Therapeutics 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. We usually like to see fairly high levels of insider ownership. Insiders own 0.9% of Halozyme Therapeutics shares, worth about US$21m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About Halozyme Therapeutics Insiders?
Our data shows a little more insider selling than buying in the last three months. But the net divestment is not enough to concern us at all. We're a little cautious about the insider selling at Halozyme Therapeutics. But it's good to see that insiders own shares in the company. Of course, the future is what matters most. So if you are interested in Halozyme Therapeutics, you should check out this free report on analyst forecasts for the company.
But note: Halozyme Therapeutics may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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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.