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We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI).
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, most countries require that the company discloses such transactions to the market.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But it is perfectly logical to keep tabs on what insiders are doing. 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.’
The Last 12 Months Of Insider Transactions At Spectrum Pharmaceuticals
Chairman of the Board Stuart Krassner made the biggest insider sale in the last 12 months. That single transaction was for US$400k worth of shares at a price of US$18.94 each. That is hardly a positive sign, even though it took place above the latest price (US$11.62). So it may not shed much light on insider confidence at current levels.
In the last twelve months insiders netted US$787k for 46.40k shares sold. All up, insiders sold more shares in Spectrum Pharmaceuticals than they bought, over the last year. The average sell price was around US$16.96. Insider selling doesn’t make us excited to buy. But the selling was at much higher prices than the current share price (US$11.62), so it probably doesn’t tell us a lot about the value on offer today. The chart below shows insider transactions (by individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
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 Spectrum Pharmaceuticals Have Sold Stock Recently
The last three months saw significant insider selling at Spectrum Pharmaceuticals. In total, Independent Director Dolatrai Vyas dumped US$64k worth of shares in that time, and we didn’t record any purchases whatsoever. This may suggest that some insiders think that the shares are not cheap.
Insider Ownership of Spectrum Pharmaceuticals
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. We usually like to see fairly high levels of insider ownership. Spectrum Pharmaceuticals insiders own about US$120m worth of shares (which is 9.8% of the company). This kind of significant ownership by insiders does generally increase the chance that the company is run in the interest of all shareholders.
What Might The Insider Transactions At Spectrum Pharmaceuticals Tell Us?
An insider sold Spectrum Pharmaceuticals shares recently, but they didn’t buy any. Looking to the last twelve months, our data doesn’t show any insider buying. The company boasts high insider ownership, but we’re a little hesitant, given the history of share sales. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.