Need To Know: The Medicines Company (NASDAQ:MDCO) Insiders Have Been Buying Shares
We often see insiders buying up shares in companies that perform well over the long term. 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 before you buy or sell The Medicines Company (NASDAQ:MDCO), you may well want to know whether insiders have been buying or selling.
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, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that ‘insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers’.
See our latest analysis for Medicines
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
The Last 12 Months Of Insider Transactions At Medicines
In the last twelve months, the biggest single purchase by an insider was when Chief Corporate Development Officer and Executive Vice President Christopher Cox bought US$2.0m worth of shares at a price of US$17.70 per share. So it’s clear an insider wanted to buy, at around the current price. That means they have been optimistic about the company in the past, though they may have changed their mind. In any event it’s generally a positive if insiders are buying shares at around the current price.
In the last twelve months insiders paid US$3.6m for 193.59k shares purchased. In the last twelve months there was more buying than selling by Medicines insiders. Their average price was about US$18.36. Although they bought at below the recent price of US$20.00 per share, it is good to see that insiders are willing to invest in the company. 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!
Medicines is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insiders at Medicines Have Bought Stock Recently
Over the last quarter, Medicines insiders have spent a meaningful amount on shares. In total, insiders bought US$3.6m worth of shares in that time, and we didn’t record any sales whatsoever. That shows some optimism about the company’s future.
Insider Ownership of Medicines
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. Medicines insiders own about US$69m worth of shares. That equates to 4.7% of the company. 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 Medicines Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss last year, which makes us a little cautious. Insiders likely see value in Medicines shares, given these transactions (along with notable insider ownership of the company). Of course, the future is what matters most. So if you are interested in Medicines, you should check out this free report on analyst forecasts for the company.
Of course Medicines may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
