We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So before you buy or sell Innoviva, Inc. (NASDAQ:INVA), you may well want to know whether insiders have been buying or selling.
What Is Insider Buying?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don’t think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. 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.’
Innoviva Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by Independent Director George Bickerstaff for US$239k worth of shares, at about US$15.90 per share. That means that an insider was happy to buy shares at above the current price. Their view may have changed since then, but at least it shows they felt optimistic at the time. We generally consider it a positive if insiders have been buying on market, even above the current price.
Over the last year, we can see that insiders have bought 32.00k shares worth US$491k. But insiders sold 27.93k shares worth US$409k. Overall, Innoviva insiders were net buyers last year. Their average price was about US$15.35. I’d consider this a positive as it suggests insiders see value at around the current price, which is US$14.21. 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 alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Insiders at Innoviva Have Bought Stock Recently
Over the last three months, we’ve seen significantly more insider buying, than insider selling, at Innoviva. Insiders spent US$491k on shares. But Chief Accounting Officer Marianne Zhen sold shares worth US$90k. We think insiders may be optimistic about the future, since insiders have been net buyers of shares.
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 Innoviva insiders own 2.4% of the company, worth about US$34m. 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 Innoviva Insiders?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. Insiders likely see value in Innoviva 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 Innoviva, you should check out this free report on analyst forecasts for the company.
Of course Innoviva may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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