We often see insiders buying up shares in companies that perform well over the long term. 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 Wave Life Sciences Ltd. (NASDAQ:WVE).
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, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. 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’.
Wave Life Sciences Insider Transactions Over The Last Year
In the last twelve months, the biggest single sale by an insider was when Director Gregory Verdine sold US$583k worth of shares at a price of US$39.52 per share. That means that an insider was selling shares at slightly below the current price (US$45.12). While sellers have a variety of reasons for selling, this isn’t particularly great to see. We generally consider it a negative if insiders have been selling on market, especially if they did so below the current price. It is worth noting that this sale was only 20% of Gregory Verdine’s holding. Gregory Verdine was the only individual insider to sell over the last year.
The chart below shows insider transactions (by individuals) over the last year. By clicking on the graph below, you can see the precise details of each insider transaction!
I will like Wave Life Sciences better if I see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
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. Wave Life Sciences insiders own about US$15m worth of shares. That equates to 0.9% 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.
What Might The Insider Transactions At Wave Life Sciences Tell Us?
It doesn’t really mean much that no insider has traded Wave Life Sciences shares in the last quarter. Our analysis of Wave Life Sciences insider transactions leaves us cautious. The modest level of insider ownership is, at least, some comfort. Of course, the future is what matters most. So if you are interested in Wave Life Sciences, you should check out this free report on analyst forecasts for the company.
Of course Wave Life Sciences may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
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