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 we'll take a look at whether insiders have been buying or selling shares in Theravance Biopharma, Inc. (NASDAQ:TBPH).
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 don't think shareholders should simply follow insider transactions. But equally, we would consider it foolish to ignore insider transactions altogether. 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.'
Theravance Biopharma Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when the , Reneé Galá, sold US$1.2m worth of shares at a price of US$27.74 per share. That means that an insider was selling shares at around the current price of US$23.54. While we don't usually like to see insider selling, it's more concerning if the sales take price at a lower price. We note that this sale took place at around the current price, so it isn't a major concern, though it's hardly a good sign.
In total, Theravance Biopharma insiders sold more than they bought over the last year. You can see a visual depiction of insider transactions (by individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
I will like Theravance Biopharma better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Insiders at Theravance Biopharma Have Sold Stock Recently
Over the last three months, we've seen significant insider selling at Theravance Biopharma. In total, Senior Vice President of Research Sharathchandra Hegde dumped US$223k worth of shares in that time, and we didn't record any purchases whatsoever. Overall this makes us a bit cautious, but it's not the be all and end all.
Does Theravance Biopharma Boast High Insider Ownership?
Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. Theravance Biopharma insiders own about US$66m worth of shares. That equates to 5.0% of the company. 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 Do The Theravance Biopharma Insider Transactions Indicate?
An insider hasn't bought Theravance Biopharma stock in the last three months, but there was some selling. Zooming out, the longer term picture doesn't give us much comfort. Insiders own shares, but we're still pretty cautious, given the history of sales. We're in no rush to buy! Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Theravance Biopharma.
But note: Theravance Biopharma may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
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