We’ve lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. 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 before you buy or sell Amphastar Pharmaceuticals, Inc. (NASDAQ:AMPH), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
It’s quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
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.’
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Amphastar Pharmaceuticals Insider Transactions Over The Last Year
CEO, Chief Science Officer & Director Yongfeng Zhang made the biggest insider sale in the last 12 months. That single transaction was for US$892k worth of shares at a price of US$20.48 each. That means that even when the share price was below the current price of US$22.40, an insider wanted to cash in some shares. While sellers have a variety of reasons for selling, this isn’t particularly great to see. When an insider sells below the current price, it does tend to make us wonder about the current valuation. Please note, however, that this single sale was just 2% of Yongfeng Zhang’s stake. Notably Yongfeng Zhang was also the biggest buyer, having purchased US$643k worth of shares.
All up, insiders sold more shares in Amphastar Pharmaceuticals than they bought, over the last year. The sellers received a price of around US$19.61, on average. It’s not too encouraging to see that insiders have sold at below the current price. But we wouldn’t put too much weight on the insider selling. The chart below shows insider transactions (by individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Amphastar Pharmaceuticals Insiders Are Selling The Stock
The last quarter saw substantial insider selling of Amphastar Pharmaceuticals shares. In total, insiders dumped US$1.0m 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.
Insider Ownership of Amphastar Pharmaceuticals
Many investors like to check how much of a company is owned by insiders. I reckon it’s a good sign if insiders own a significant number of shares in the company. It appears that Amphastar Pharmaceuticals insiders own 8.9% of the company, worth about US$92m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Does This Data Suggest About Amphastar Pharmaceuticals Insiders?
Insiders haven’t bought Amphastar Pharmaceuticals 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’d think twice before buying! Of course, the future is what matters most. So if you are interested in Amphastar Pharmaceuticals, you should check out this free report on analyst forecasts for the company.
But note: Amphastar Pharmaceuticals 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.