Quite a few insiders have dramatically grown their holdings in OPKO Health, Inc. (NASDAQ:OPK) over the past 12 months. An insider's optimism about the company's prospects is a positive sign.
While insider transactions are not the most important thing when it comes to long-term investing, logic dictates you should pay some attention to whether insiders are buying or selling shares.
The Last 12 Months Of Insider Transactions At OPKO Health
In fact, the recent purchase by Chairman & CEO Phillip Frost was not their only acquisition of OPKO Health shares this year. They previously made an even bigger purchase of US$2.3m worth of shares at a price of US$3.09 per share. That means that an insider was happy to buy shares at above the current price of US$1.89. It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While OPKO Health insiders bought shares during the last year, they didn't sell. Their average price was about US$2.71. These transactions suggest that insiders have considered the current price attractive. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
OPKO Health is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders At OPKO Health Have Bought Stock Recently
Over the last quarter, OPKO Health insiders have spent a meaningful amount on shares. Specifically, Chairman & CEO Phillip Frost bought US$2.5m worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
For a common shareholder, it is worth checking how many shares are held by company insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It's great to see that OPKO Health insiders own 45% of the company, worth about US$663m. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
So What Does This Data Suggest About OPKO Health Insiders?
It is good to see the recent insider purchase. And an analysis of the transactions over the last year also gives us confidence. But we don't feel the same about the fact the company is making losses. Once you factor in the high insider ownership, it certainly seems like insiders are positive about OPKO Health. That's what I like to see! In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing OPKO Health. While conducting our analysis, we found that OPKO Health has 2 warning signs and it would be unwise to ignore these.
Of course OPKO Health 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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