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Should You Be Worried About Insider Transactions At Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN)?

Kristin Rankin

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It is not uncommon to see companies perform well in the years after insiders buy shares. 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 Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN).

Do Insider Transactions Matter?

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, rules govern insider transactions, and certain disclosures are required.

We don’t think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Harvard University study found that ‘insider purchases earn abnormal returns of more than 6% per year.’

See our latest analysis for Supernus Pharmaceuticals

Supernus Pharmaceuticals Insider Transactions Over The Last Year

In the last twelve months, the biggest single sale by an insider was when Chief Scientific Officer & Senior VP of Intellectual Property Padmanabh Bhatt sold US$263k worth of shares at a price of US$59.90 per share. Although we don’t gain confidence from insider selling, we note that this large sale was at well above current price of US$36.63. So it may not tell us anything about how insiders feel about the current share price. The only individual insider seller over the last year was Padmanabh Bhatt.

You can see the insider transactions (by individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

NasdaqGM:SUPN Recent Insider Trading, February 22nd 2019

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Does Supernus Pharmaceuticals Boast High Insider Ownership?

Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that Supernus Pharmaceuticals insiders own 3.3% of the company, worth about US$63m. 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 Supernus Pharmaceuticals Insiders?

There haven’t been any insider transactions in the last three months — that doesn’t mean much. We don’t take much encouragement from the transactions by Supernus Pharmaceuticals insiders. But it’s good to see that insiders own shares in the company. Therefore, you should should definitely take a look at this FREE report showing analyst forecasts for Supernus Pharmaceuticals.

But note: Supernus 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.

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.