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Should You Be Worried About Insider Transactions At Puma Biotechnology, Inc. (NASDAQ:PBYI)?

Simply Wall St

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 Puma Biotechnology, Inc. (NASDAQ:PBYI).

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 in the company. However, most countries require that the company discloses such transactions to the market.

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'.

View our latest analysis for Puma Biotechnology

The Last 12 Months Of Insider Transactions At Puma Biotechnology

The Founder, Alan Auerbach, made the biggest insider sale in the last 12 months. That single transaction was for US$91k worth of shares at a price of US$20.67 each. While we don't usually like to see insider selling, it's more concerning if the sales take place at a lower price. The silver lining is that this sell-down took place above the latest price (US$8.81). So it may not shed much light on insider confidence at current levels.

Over the last year, we note insiders sold 10856 shares worth US$239k. In the last year Puma Biotechnology insiders didn't buy any company stock. You can see the insider transactions (by individuals) over the last year depicted in the chart below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

NasdaqGS:PBYI Recent Insider Trading, August 8th 2019

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Insiders at Puma Biotechnology Have Sold Stock Recently

The last three months saw some Puma Biotechnology insider selling. Insiders divested only US$22k worth of shares in that time. Neither the lack of buying nor the presence of selling is heartening. But the volume sold is so low that it really doesn't bother us.

Does Puma Biotechnology Boast High Insider Ownership?

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. Insiders own 13% of Puma Biotechnology shares, worth about US$45m. While this is a strong but not outstanding level of insider ownership, it's enough to indicate some alignment between management and smaller shareholders.

What Might The Insider Transactions At Puma Biotechnology Tell Us?

We did not see any insider buying in the last three months, but we did see selling. However, the sales are not big enough to concern us at all. Recent insider selling makes us a little nervous, in light of the broader picture of Puma Biotechnology insider transactions. But we do like the fact that insiders own a fair chunk of the company. Of course, the future is what matters most. So if you are interested in Puma Biotechnology, you should check out this free report on analyst forecasts for the company.

But note: Puma Biotechnology 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.

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 editorial-team@simplywallst.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.