Generally, when a single insider buys stock, it is usually not a big deal. However, when several insiders are buying, like in the case of Vaxxinity, Inc. (NASDAQ:VAXX), it sends a favourable message to the company's shareholders.
While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
Vaxxinity Insider Transactions Over The Last Year
The Co-Founder & Executive Chairman of the Board Louis Reese made the biggest insider purchase in the last 12 months. That single transaction was for US$242k worth of shares at a price of US$13.82 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being US$2.14). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
Over the last year, we can see that insiders have bought 31.95k shares worth US$344k. But insiders sold 248.00 shares worth US$3.2k. In the last twelve months there was more buying than selling by Vaxxinity insiders. Their average price was about US$10.76. This is nice to see since it implies that insiders might see value around current prices. You can see the insider transactions (by companies and 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!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 9.7% of Vaxxinity shares, worth about US$26m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
What Might The Insider Transactions At Vaxxinity Tell Us?
It doesn't really mean much that no insider has traded Vaxxinity shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Insiders own shares in Vaxxinity and we see no evidence to suggest they are worried about the future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Vaxxinity is showing 3 warning signs in our investment analysis, and 1 of those doesn't sit too well with us...
Of course Vaxxinity 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 currently account for open market transactions and private dispositions, but not derivative transactions.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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