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 we'll take a look at whether insiders have been buying or selling shares in Avid Bioservices, Inc. (NASDAQ:CDMO).
What Is Insider Selling?
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 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 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'.
The Last 12 Months Of Insider Transactions At Avid Bioservices
In the last twelve months, the biggest single sale by an insider was when the insider, Joel McComb, sold US$326k worth of shares at a price of US$6.57 per share. So we know that an insider sold shares at around the present share price of US$5.61. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. Given that the sale took place at around current prices, it makes us a little cautious but is hardly a major concern. Joel McComb was the only individual insider to sell shares in the last twelve months.
Happily, we note that in the last year insiders paid US$101k for 20000 shares. But they sold 50000 for US$326k. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. 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 that insiders are buying, rather than selling, then you might just love this free list of companies. (Hint: insiders have been buying them).
Avid Bioservices Insiders Bought Stock Recently
Over the last three months, we've seen significant insider buying at Avid Bioservices. In total, insiders bought US$101k worth of shares in that time, and we didn't record any sales whatsoever. That shows some optimism about the company's future.
Does Avid Bioservices Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Insiders own 7.7% of Avid Bioservices shares, worth about US$24m. 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 Do The Avid Bioservices Insider Transactions Indicate?
It's certainly positive to see the recent insider purchases. However, the longer term transactions are not so encouraging. We don't take much heart from transactions by Avid Bioservices insiders over the last year. But they own a reasonable amount of the company, and there was some buying recently. So they seem pretty well aligned, overall. Of course, the future is what matters most. So if you are interested in Avid Bioservices, you should check out this free report on analyst forecasts for the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.