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 shareholders might well want to know whether insiders have been buying or selling shares in Athenex, Inc. (NASDAQ:ATNX).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
Insider transactions are not the most important thing when it comes to long-term investing. 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'.
Athenex Insider Transactions Over The Last Year
The insider, Songyi Zhang, made the biggest insider sale in the last 12 months. That single transaction was for US$13m worth of shares at a price of US$13.23 each. While insider selling is a negative, to us, it is more negative if the shares are sold at a lower price. The good news is that this large sale was at well above current price of US$10.80. So it is hard to draw any strong conclusion from it.
Over the last year, we can see that insiders have bought 228871 shares worth US$2.8m. On the other hand they divested 1220053 shares, for US$16m. Over the last year we saw more insider selling of Athenex shares, than buying. They sold for an average price of about US$12.91. We don't gain confidence from insider selling near the recent share price. While some insiders have decided to take some money off the table, we wouldn't put too much weight on this fact. 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!
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Insiders at Athenex Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Athenex. Overall, three insiders shelled out US$499k for shares in the company -- and none sold. This makes one think the business has some good points.
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Athenex insiders own 24% of the company, currently worth about US$199m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.
What Might The Insider Transactions At Athenex Tell Us?
It is good to see recent purchasing. However, the longer term transactions are not so encouraging. Overall, we'd prefer see a more sustained buying from directors, but with a significant insider holding and more recent purchases, Athenex insiders are reasonably well aligned, and optimistic for the future. 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.
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.
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If you spot an error that warrants correction, please contact the editor at email@example.com. 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.